Service tax cannot be levied on ready mix concrete supply without identifying specific service provided

CESTAT Chandigarh held that service tax cannot be levied on supply of ready mix concrete without clear identification of specific service provided. Revenue alleged appellant rendered services but failed to identify the service classification or consideration received. The tribunal emphasized that service tax requires clear identification of service provider, recipient, and consideration. Confirming tax based on document discrepancies without identifying actual service is legally unsustainable. Ready mix concrete supply constitutes a sales contract, not service contract, making it non-taxable under Finance Act 1994. Appeal allowed, impugned order set aside.

---

---

Issues involved:
The issue involves the leviability of service tax on the supply of ready mix concrete, confirmation of demand under various sections of the Finance Act, 1994, invoking the extended period for demand, and the imposition of penalties.

Leviability of Service Tax on Supply of Ready Mix Concrete:
The appellant, engaged in the business of manufacturing and supplying ready mix concrete, contested the demand of service tax based on the gross receipts in the Profit & Loss account. The appellant argued that they were not providing any service but were involved in the manufacturing and delivery of ready mix concrete, which is considered an excisable product. Citing various judgments, the appellant contended that since they had paid central excise duty and VAT on the products, charging service tax was not justified. The appellant also highlighted that the adjudicating authority confirmed the demand without considering the submitted documents proving no service was provided. The appellant further argued against the invocation of the extended period for demand, emphasizing the lack of evidence to prove any malafide intention or suppression on their part.

Confirmation of Demand and Imposition of Penalties:
The Revenue, represented by the Authorized Representative, maintained that the appellant had to provide services as per the agreement with M/s Signature Global (India) Pvt Ltd, and as the appellant did not register or pay service tax, there was an intention to evade payment. The Revenue contended that discrepancies in various returns justified the confirmation of service tax. However, the Tribunal found that the Department failed to prove the specific service provided and the consideration received. Relying on precedents, the Tribunal emphasized that service tax could only be levied when there was clear evidence of service provision and consideration. The Tribunal set aside the impugned order, stating that demanding service tax without identifying the service and solely based on document differences was legally unsustainable.

Decision and Conclusion:
After considering the arguments from both sides and reviewing the case records, the Tribunal concluded that the demand of service tax was not justified due to the lack of evidence proving the provision of taxable services. The Tribunal referred to previous judgments to support its decision that the primary purpose of the contract was the supply of ready mix concrete, not the provision of taxable services. Consequently, the impugned order was set aside, and the appeal was allowed.

Separate Judgment by Judges:
No separate judgment was delivered by the judges in this case.

---