Case Law Details
Kirti Infrastructures Ltd Vs C.C.E. & S.T (CESTAT Ahmedabad)
FACTS- The appellant at the outset submits that with effect from 01.06.2007, the new service namely Works Contract Service was made effective , classification of aforesaid service would undergone a change in case of long term contracts even though part of the service was classified under respective taxable service prior to 01.06.2007. This is because the works contract describes the nature of activity more specifically and therefore as per the provision of Section 65A of the Finance Act, 1994 it would be appropriate classification for the part of the service provided after that date. The appellant contended that he has discharged the VAT on the Works Contract considering the same as a deemed sale and the contract was executed for service and supply of goods together.
CONCLUSION- From the scanned copies of VAT return it is clear that the appellant have discharged the VAT on their works contract service. Therefore, both criteria that the execution of the work with material and on such construction service the appellant have discharged the VAT is satisfied, this clarifies that the service is Works contract Service. The appellant have admittedly paid the service tax on the works contract service for the relevant period of this case, therefore in our considered view, the construction service provided by the appellant is correctly classifiable under works contract
service. Hence, the demand under Commercial or Industrial Construction Service is not sustainable.
It was held that the issue in question has been settled by Hon’ble Supreme Court in the case of CST Vs. Bhayana Builders (P) Ltd – 2018 (10) GSTL 118 (SC), therefore, for the purpose of computing the gross value of Commercial or Industrial Construction Service value of free supplies material by the service recipient need not be added in the gross Value of service. Accordingly, the issue is covered by the said judgment. The impugned order is set aside and appeal is allowed. Accordingly, the demand in the present case was declared non- sustainable. Hence, the impugned order was set aside and the appeal was allowed.
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