Works contract valuation under the post-2012 service tax regime could not sustain a repeated demand already rejected in the assessee's own case.

A post-01.07.2012 service tax demand on works contract valuation was found unsustainable where it was raised on the gross contract value despite VAT having been paid on 80% of the contract value. The Tribunal followed its earlier final order in the assessee's own case, which had already rejected identical demands for the same post-2012 period and factual basis. Applying that prior reasoning under the revised service tax framework, it concluded that the confirmation of tax and penalty could not stand and set aside the demand in favour of the assessee.

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Issues: Whether the service tax demand for the period 01.04.2014 to 31.03.2015, arising from valuation of works contract on the basis of the gross contract value notwithstanding VAT having been paid on 80% of the contract value, was sustainable.

Analysis: The dispute was considered in the light of the earlier final order in the appellant's own case, where demands for the post-01.07.2012 period had been set aside. The governing approach applied was that, after the substitution of the taxable service regime in 2012, demands relating to works contract had to conform to the revised legal framework and the earlier reasoning on identical facts. Since the present demand was founded on the same basis as the earlier period already disapproved by the Tribunal, the confirmation of tax and penalty could not be sustained.

Conclusion: The demand was held unsustainable and was set aside in favour of the assessee.

Ratio Decidendi: Where a later service tax demand for works contract is founded on the same post-2012 valuation basis already rejected in the assessee's own case, the demand cannot be sustained and is liable to be set aside following the earlier binding decision.

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