Larsen & Toubro Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, disposed of four appeals involving a common issue concerning the classification of services and liability under the partial reverse charge mechanism (RCM). The appellant is engaged in the manufacture of steel structures and is registered with the department for taxable services including Erection, Commissioning and Installation Service, Maintenance or Repair Service, and for payment of service tax under reverse charge in respect of Manpower Recruitment Services and Rent-a-Cab Service.
During an audit of the appellant’s ECC Workshop accounts for the periods July 2012 to March 2014 and April 2014 to March 2015, the department observed that the appellant had engaged contractors to carry out certain operations within its factory premises. Under the work orders, the appellant supplied materials, power, and machinery, while the work was executed under the appellant’s supervision and control. The contractors were paid on a per-piece or per-metric-ton basis. The department treated these arrangements as Manpower Recruitment and Supply Service and held that the appellant was liable to pay 75% of the service tax under the partial reverse charge mechanism in terms of Notification No. 30/2012-ST dated 20.06.2012.
