The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai, upheld an order passed by the Commissioner (Appeals), Central Excise & Customs, Goa which ruled that activities of an independent service provider cannot be treated as ‘ Construction of Residential Complex Service ’.
The Appellant, Darshana Construction was awarded the work order for undertaking ‘Civil Masonry Work’ for M/s Prabhu Construction, Panaji, Goa. During the course of scrutiny of the contractee, it was observed by the Service Tax department that the activity undertaken by the appellant pursuant to the work order, was confirmed to the definition of taxable service under the category of ‘Commercial or Industrial Construction Service’. Since the appellant did not pay any service tax and did not file the statutory returns, the department proceeded against the appellant for confirmation of the service tax demand.
Appellant further pleaded that they had undertaken the activities of construction of flats as sub-contractor for M/s Prabhu Construction and that since the activities were for the construction of residential flats, which were less than twelve in numbers, such activities cannot be considered as taxable service, under the category of ‘Construction of Commercial or Industrial Service’.
Technical Member C.J. Mathew and Judicial member S.K. Mohanty while dismissing off the appeal in favor of the revenue department held, “Since the appellant is an independent service provider, the activities undertaken by it, in our considered view, should not fall under the category of ‘Construction of Residential Complex Service’. . . .Further, the said documents do not indicate that the appellant had supplied any material for execution of the job or had paid VAT/ Sales Tax into the Government exchequer with regard to purchase of any goods. Thus, the contention of the appellant cannot be accepted that it had provided ‘Works Contract Service’ to M/s. Prabhu Construction.”To Read the full text of the Order CLICK HERE