2026 (1) TMI 1606

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.... Act, 1994 and by invoking the extended period of limitation, service tax amount of Rs. 86,30,814/- for the period from October 2005 to March 2007 was confirmed along with interest and penalties were imposed under Sections 76, 77 and 78 of the Finance Act, 1994. Aggrieved by the above order, the appellant is in appeal before us. 3. The Learned Counsel on the date of hearing submitted that the appellant had entered into an Agreement dated 22.4.2005 with M/s. Berger Paints India Ltd. (BPIL) to provide painting services on behalf of BPIL. In terms of the Agreement, the appellant collected 50% of the estimated cost from the customers for purchase of paints and arranged contractors for undertaking painting and on completion of the job, the balance amounts were collected. Out of the total amount, necessary reductions of amounts payable to the contractors, the cost of the material was deducted and balance was remitted to BPIL. For carrying out these activities, the appellant was provided with salary reimbursement plus amount equal to 25% of the total salary expenses. The appellant was discharging service tax on the said consideration received under the category of 'Business Auxiliary S....

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....ed under Section 65(30a) of the Finance Act, 1994 but rejects the same on the ground that it is applicable only to new constructions and not for old buildings. The Commissioner also admits the fact that service tax has been paid by the appellant on that portion of value which is attributable towards the cost of salary of persons employed for the painting services. 5.1 The Construction of Complex as per Section 65(30a) is defined as follows: "(30a) "construction of complex" means - (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex;" 5.2 From the definition placed above, we find that the appellant is undertaking painting services as defined under Section 65(30a) of the Act, hence the question of dem....

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....) and (c); or (e) Turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;" On reading of the above definition of works contract, we find that to cover the appellant's activity under works contract it is not necessary that the said activity should be carried out only in respect of new building. As per clause (b) in addition to construction of a new building there is another category "Civil structure and part thereof" primarily for the purpose of commerce or industry. This category is a very vast category, which covers the plants machinery building. The appellant has carried out the painting work on this plant, machinery, building. As regard this category there is no condition that such as civil structure or part thereof should be new. The clause (d) clearly specifies that any activity which is used for completion and finishing services, repairing, renovation or restoration or similar services in relation to (b) and (c) are covered under works contract service. The painting is clearly covered under term finishing service, repair, renovation or similar service. Since we stated above that a civil construction or a part....

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....39;Interior Decorator Service' is incorrect. We also find that the Board vide letter dated 27-7-2005 which was issued for clarifying the Scope of Commercial or Industrial Construction Service' (after amendment), has categorically clarified as under:- 2) Post construction completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentary, especially if undertaken as an isolated or standalone contract, are also specifically included. Thus post construction completion and finishing services are specifically included in the definition of commercial or industrial construction service." It can be seen from the above that the activities which had been undertaken, as enumerated in the clarification, have now been specifically included. This would indicate that prior to 16-6-2005, these were not included in the category of 'interior decorator service'. In a series of decisions of the Tribunal which laid down law that if the category of services is brought into service tax net from a specific date, such services would not be covered under any other category of....