2024 (2) TMI 1081 - AT - Service Tax

Appeal Allowed: Tribunal Rules Services Fall Under 'Works Contract Service,' Exempting Appellant from Additional Tax Demand.

The appellant's appeal against the service tax demand under 'Erection, Commissioning and Installation Service' was allowed. The Tribunal found that the ... Levy of service tax - Erection, Commissioning and Installation Service - activities of fabrication of structures, erection, commissioning and installation to the plant and machineries, equipment structures etc. - period from May, 2006 to March, 2008 - service merits to be classified under Works Contract Service, regarding which SCN is silent - HELD THAT:- It is not in dispute by the Revenue that the appellant has taken the activities of erection, commissioning and installation services along with materials. Therefore, the merits classification of the above services under “Works Contract Service” and no demand is raised against the appellant under “Works Contract Service”. Therefore, following the decision of the Hon’ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT], wherein the Hon’ble Apex Court has observed All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. The merits classification of the impugned service is under “Works Contract Service” , if it is presumed that the appellant is liable to pay service tax on “Works Contract Service”, then the appellant is required to pay service tax on 33% on the value of contract executed by them and the appellant has paid the service tax more than that. Thus, no demand is sustainable against the appellant - appeal allowed. Issues involved: Appeal against demand of service tax under 'Erection, Commissioning and Installation Service' category.Summary:The appellant, engaged in fabrication, erection, commissioning, and installation activities, faced a demand for service tax under the 'Erection, Commissioning and Installation Service' category. Initially, the demand was dropped, but the Revenue challenged this decision. The appellant contended that they had paid service tax on the service portion and claimed exemption from excise duty. The Revenue argued for upholding the demand.Upon review, it was established that the appellant's activities fell under 'Works Contract Service' which did not attract any demand. Referring to a Supreme Court decision, it was clarified that the taxable services mentioned in the law referred to service contracts only, not composite works contracts. It was emphasized that no demand was sustainable against the appellant as they had already paid service tax exceeding the required amount.Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief.