The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that commercial and industrial construction services are exempted from service tax under the exemption notification.
Raj Inter Decor Private Limited, the appellant assessee was engaged in civil construction including interiors and wooden furniture; they had registered themselves under “Commercial and Industrial Construction Service”.
The assessee appealed against the order passed by the Commissioner for confirming the demand of service tax for availing the abatement.
R.K. Hasija and Shivang Puri, the counsels for the assessee contended that the work undertaken by the assessee was a composite non-vivisectable work involving service and material and the show-cause notice issued was time barred as the assessee had been regularly filing the Service Tax Returns.
Shivam Syal, the counsel for the department contended that the assessee themselves registered under “Commercial and Industrial Construction Service” and accordingly, a show-cause notice was issued denying the abatement as the assessee did not submit any proof regarding the involvement of material in the contract.
The Bench observed that the assessee have rendered service under a composite contract and as such are not liable to pay service tax for the period before 01.06.2007 and the demand for the subsequent period i.e. after 01.06.2007 cannot be sustained having been raised under a wrong Head.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee.
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