No Service Tax on mere Laying of Interlocking Paver blocks & Approach Roads

By Editor4 Service Tax Judiciary October 7, 2018

TaxGuru Citation: 2018 taxguru.in 1566
Case Name: M/s. Abideep Interlock Pavers Pvt. Ltd Vs Commissioner of Central Excise (CESTAT Bangalore)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All CESTAT, CESTAT Bangalore

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M/s. Abideep Interlock Pavers Pvt. Ltd Vs Commissioner of Central Excise (CESTAT Bangalore)

At present, services rendered for construction of commercial or industrial buildings is taxable. However, construction of roads is not liable to service tax. A point has been raised that if a commercial complex is constructed which also contains roads whether the value of construction of roads would be liable to service tax.

If the contract for construction of commercial complex is a single contract and the construction of road is not recognized as a separate activity as per the contract, then the service tax would be leviable on the gross amount charged for construction including the value of construction of roads.

So construction of roads if undertaken as a part of contract for construction of a commercial complex or industrial building, is taxable. In the instant case, the appellants have not undertaken any such activity and their contract with their buyers was limited to laying of interlocking paver blocks and the approach roads, so no service tax is leviable.

FULL TEXT OF THE CESTAT JUDGMENT

The appellants, M/s. Abhideep Interlock Pavers Pvt. Ltd., are engaged in the manufacture of interlocking concrete bricks and is vailing the benefit of SSI under Notification No.8/2003-CE. The appellants are also undertaking embedding of interlocking bricks at the site of the customers for laying of internal roads and approach roads to the compound of the building on labour basis as per Section 65(105)(zzq). The Department alleged that the appellants are providing construction services during the period September 2004 to November 2005. A show-cause notice dated 31.3.2006 which was confirmed by the Assistant Commissioner vide Order-in-Original No.71/2006-07 dated 14.2.2005 and OIO No.17/2008-ST JD dated 28.5.2008. The Commissioner (A) vide Order-in-Appeal No.14/2008-CE dated 28.3.2006 and OIA No.151/2009 dated 21.4.2009 has upheld the Orders-in-Original and confirmed the service tax with interest; however, he set aside the penalties imposed under Section 78 of the Finance Act, 1994 and remanded back the case to the original adjudicating authority for reworking the duty liability taking into account the cum-duty price in terms of Section 67(2) of the Finance Act, 1994. The details of the appeals are given below:

Appeal No.

Period

SCN date

OIO

OIA

Service Tax

ST/262/2008

16.6.2005 to Nov. 2005

31.3.2006

No.71/2006-07 dated 14.2.2005

No.14/2008-CE dated 28.3.2006

Rs.4,57,270/-