P. Natesan & Co. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that exemption of service tax as per section 102 of the Finance Act, 1994 is available only if the contract is entered prior to 01.03.2015. Here, contract is entered on 19.03.2015 and hence exemption not available.
Facts- The appellant provided works contract service to Military Engineer Services, INS Agrani, Red Fields Post, Coimbatore. They undertook and completed such services during the period 2015-16 and then filed refund claim for refund of the service tax paid by them in terms of Section 102 of the Finance Act, 1994 which exempted services provided to Government for the period 01.04.2015 to 29.02.2016. After due process of law, the original authority rejected the refund claim. Against this order, the appellant preferred appeal before Commissioner (Appeals) who upheld the order of rejection of refund by the original authority. Hence this appeal.
Conclusion- Undisputedly, the contract has been entered and signed on 19.03.2015. Merely receiving a tender or opening a tender cannot be considered as acceptance. There should be communication or intimation of the acceptance.
Held that as per Section 102, the service provider is eligible for exemption of service tax only if contract is entered prior to 01.03.2015. It has been expressly stated in Section 102 that the contract has to be entered prior to 01.03.2015 to avail the exemption. In this case, since the contract has been entered on 19.03.2015, the appellant is not eligible for exemption of service tax.
FULL TEXT OF THE CESTAT CHENNAI ORDER
Brief facts of the case are that appellant is engaged in providing Works Contract Services and is registered with the Department for providing such services. The appellant provided works contract service to Military Engineer Services, INS Agrani, Red Fields Post, Coimbatore. They undertook and completed such services during the period 2015-16 and then filed refund claim for refund of the service tax paid by them in terms of Section 102 of the Finance Act, 1994 which exempted services provided to Government for the period 01.04.2015 to 29.02.2016. After due process of law, the original authority rejected the refund claim. Against this order, the appellant preferred appeal before Commissioner (Appeals) who upheld the order of rejection of refund by the original authority. Hence this appeal.
2. On behalf of the appellant, Ld. Consultant Shri N.K. Bharath Kumar appeared and argued the matter. He adverted to Section 102 which was inserted by Finance Act, 2016 and submitted that the contractor who has provided works contract services is not liable to pay service tax on such services if such services are provided to the Government during the period 01.04.2015 to 29.02.2016. As per the said section, the contract has to be entered into before 01.03.2015. The lower authority has rejected the refund claim stating that though the tender was opened by the office of the Military Engineer Services on 23.01.2015, the contract was signed only on 19.03.2015; therefore the exemption is not eligible. The details of the dates and event are furnished as per the following chart :
