Case Law Details
Shree Balaji Engicons (P) Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata)
In the case of Shree Balaji Engicons (P) Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata), the appellant challenged a demand for Service Tax categorized under “commercial or industrial construction service” for the period from 10.09.2004 to 31.03.2005. The appellant’s services involved a turnkey contract for developing an ash pond, including the supply of materials. The CESTAT ruled that such services fall under “works contract service,” which became taxable only from 01.06.2007, as per the Supreme Court’s decision in Commissioner of Central Excise and Customs, Kerala v. Larsen & Toubro Ltd. Therefore, no service tax was payable for the period in question. The demand was deemed unsustainable, and no penalty was imposed. The appeal was allowed with consequential relief.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant is in appeal against the impugned order wherein the demand of Service Tax has been confirmed against them under the category of “commercial or industrial construction service” for the period from 10.09.2004 to 31.03.2005 by issuance of the Show Cause Notice dated 07.09.2009 for the activity of the appellant namely, turnkey contract for development of ash pond.
2. Heard the parties and considered their submissions.
3. We have gone through the scope of work and the agreement placed by the appellant before us which clearly shows that the services rendered by them include supply of materials also, which is appropriately classifiable under the category of “works contract service”, which is taxable with effect from 01.06.2007.
3. As the same view has been taken by the Hon’ble Apex Court in the case of Commissioner of Central Excise and Customs, Kerala v. Larsen & Toubro Ltd. [2015 (39) S.T.R. 913 (S.C.)] wherein it has been held that any services rendered by an assessee along with materials and in that circumstances, the said activity shall be properly classifiable as “works contract service”.
4. Admittedly, in the case on hand, the service rendered by the appellant falls under the category of “works contract service”, which came into effect from 01.06.2007 and the period involved in this case is prior to the said date. Therefore, we observe that for the said activity, no service tax is payable by the appellant. In these circumstances, we hold that whole of the demand is not sustainable against the appellant under the category of “commercial or industrial construction service”, which qualified as “works contract service”.
4.1. In the facts and circumstances of the case, no penalty is imposable on the appellant.
5. In these terms, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Dictated and pronounced in the open court)
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