Service Tax Demand for Pre-June 2007 Erection Services Overturned Due to Indivisible Works Contract.

The appeal was allowed, setting aside the Order-in-Appeal that upheld the Service Tax demand for "Erection, Commissioning and Installation" services for the period before June 2007. The court found the demand invalid, referencing a SC ruling and a Tribunal decision, as the works contract was indivisible and included both construction activity and supply of goods. Consequently, the appellant was entitled to any consequential benefits as per law.

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Issues involved: Appeal against Order-in-Appeal upholding Service Tax demand for "Erection, Commissioning and Installation" service pre-June 2007.

Summary:
The appeal was filed against the Order-in-Appeal rejecting the appeal and confirming the demand of Service Tax against the taxpayer for "Erection, Commissioning and Installation" service, along with interest and penalties. The appellant contended that the works contract with the Municipality for a project involved both construction activity and supply of goods, which was indivisible. Citing a Supreme Court decision and a Tribunal order, the appellant argued that the demand cannot stand.

The Assistant Commissioner defended the orders of the lower authorities, asserting that the demand was justified. The main issue for determination was whether the demand for the period pre-June 2007 was justified.

Upon reviewing the documents, it was found that the service carried out by the appellant under the works contract was accepted by the Revenue, and the period in question was before June 2007. Citing the Supreme Court ruling and a previous Tribunal decision, it was concluded that the demand was not valid. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per law.

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