TaxTMI 
TaxTMI 
2025 (11) TMI 1703
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....er the mobilization advance received for providing taxable services during the period of 01.04.2006 to 31.12.2007 is liable to service tax and whether the Appellant is liable to pay service tax on expenditure incurred while availing GTA services on RCM basis. 2. Appellant is providing service and registered under the category of residential construction service, GTA...etc. During audit, it is observed that Appellant is providing construction services to their customers and the material supplied free of cost for construction is not included in the assessable value and also by raising other issues, show cause notice was issued. Adjudication authority as per the impugned order denied the benefit of Notification No. 1/2006 dated 01.03.2006 a....
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....e option before payment of service tax as held in the case of M/s. Nagarjuna Construction Co. Ltd. Vs. G.O.1- reported in 2010(19)S.T.R. 321(AP-) by the High Court. Such finding is unsustainable, since the issue is settled by various decisions of the High Court/Supreme Court. The Learned Counsel further submits that the issue is squarely covered by the judgment of the Hon'ble Supreme Court in the matter of Commissioner of Service Tax Vs. M/s Bhayana Builders Pvt. Ltd. (2018 (10) GSTL 118 (S.C.). where it is held that:- "16. In fact, the definition of "gross amount charged" given in Explanation (c) to Section 67 only provides for the modes of the payment or book adjustments by which the consideration can be discharged by the service....
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.... the benefit cannot be denied to the appellants. We find that Tribunal and Courts have been setting aside the demands raised in respect of Composite Works Contracts after the judgment in the case of L&T. The appellants have been paying duty albeit under a different Head before 01.06.2007. It would be miscarriage of justice if the appellants are denied the compounded scheme of payment of duty under Works Contract after 01.06.2007 which could have been easily exercised by those who were not paying duty before 01.06.2007. The appellants cannot be put to jeopardy for the reason that they have been paying service tax before 01.06.2007 though they were not legally required to pay in view of the judgment in the case of L&T. 16. Coming to ....
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.... for the purchase of machinery and other materials, which are nomenclated and accounted as 'mobilization advance', which is evidenced by agreement executed. The mobilization advance gets adjusted in the subsequent bills on completion of the stages of construction only. From the above reading it is clear that the taxability is with respect to amount received for services only, however in construction industry the amount received in advance would generally not received for the service. It would be essentially for mobilizing the goods that may be required or raw materials or capital goods or equipment required for the execution of the project. Since section 67(3) of Finance Act, 1994 states that "Gross amount charged for the taxable se....
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....able with interest before issue of show cause notice, dispute is only as regarding penalty. 7. The Learned Authorized Representative (AR) for the revenue reiterated the finding in the impugned order. 8. Heard both sides. As regarding first issue, the Commissioner in the impugned order has observed as follows 'the assessee's claim for classification of the impugned service under works contract is only an afterthought, on issue of notice for denial of benefit of notification No.1/2006 and hence all submissions made in the context of works contract service in the instant case are to be rejected as non-maintainable -----' However this issue now stands settled in favour of the appellant by the supreme court in the case of Commissioner of C....