TaxTMI 
TaxTMI 
2026 (6) TMI 762
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....e Tax Registration No.AATPN2547AST001 from 24.10.2008 for providing services of Commercial or Industrial Construction Service, Works Contract Service and Interior Decorators Service. It is stated that before 24.10.2008 a partnership firm with Registration No.ABFFS2205RST001 dated 17.05.2006 operated from the said premises with effect from 25.06.2007, that is stated to have been engaged in the activities of wood work, carpentry, water proofing, plaster of paris work, polishing, ceramic tile flooring, electric cabling, other interior work etc. for commercial or industrial buildings and civil structures. 3. During audit of the accounts, it was noticed that the erstwhile partnership firm provided services namely fixing of main door, cable door, wooden partition work, wooden panelling, making tables, sofas, conference tables, painting, water proofing, false ceiling with Plaster of Paris, polishing, ceramic tile/wooden flooring, electric cabling, pest control, other interior and carpentry work. They treated the above activities as construction service, availed 67% abatement and paid service tax on 33% of gross amount in terms of Notification No.01/2006-ST dated 01.03.2006. The Departm....
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.... rendered by the erstwhile Partnership Firm. It was argued that the appellant is a proprietary concern engaged in works contract services and interior decoration for which it was registered under Service Tax Registration No.AATPN2547AST001 dated 24.10.2008. The impugned demand pertains to the period prior to September 2007 and relates to activities carried out by an erstwhile Partnership Firm which was separately registered under Service Tax Registration No.ABFFS2205RST001 dated 17.05.2006 as admitted in the show cause notice. Ld. Counsel contended that the said Partnership Firm had surrendered its Service Tax Registration on 26.10.2009 and since a Proprietary Concern and a Partnership Firm are distinct legal entities, service tax liability of one cannot be fastened upon the other. It was contended that the appellant had not submitted any undertaking/bond that the appellant was responsible for payment of service tax/demand relating to the partnership firm. 5. The Ld. Counsel, without prejudice to the above contentions, further argued that the main activity of the erstwhile partnership firm was works contract service, involving transfer of property in goods and VAT was charged an....
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....based on separate PAN numbers. The fact that the registration of the partnership firm was surrendered on 26.10.2009, prior to the issuance of the present SCN, remains uncontroverted. While undoubtedly, the liability of the erstwhile firm does not automatically vanish and if the dues remain unpaid, the Department may probably be able to take recourse to Section 87 of the Finance Act, 1994 read with the Indian Partnership Act, 1932, however, even if the present proprietary firm is that of a person who was an erstwhile partner of the partnership firm, it was incumbent upon the Department to bring on record whether the present proprietary firm had acquired the partnership's ongoing business in a manner that the proprietor may be held personally liable for the erstwhile firm's tax arrears and duly reflecting the proprietor as the successor, not the non-existent partnership firm. Since, the demand pertains to a period April 2006 to June 2007, we find that the impugned SCN itself is not even addressed to the partner who is the proprietor and the erstwhile partner of the firm, but has been addressed to the proprietary concern who has a fresh registration. Therefore, without evidencing in a....
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....orks contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. xxxx 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services. 44. We have been informed by counsel for the revenue that several exemption notifications have been granted qua service tax "levied" by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since the levy itself of service tax has been found to be non-existent, no questio....