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Composite Contracts undertaken before June 1, 2009 is classified as ‘Commercial Construction Service’, No Refund allowed: CESTAT [Read Order]

Commercial Construction Service - CESTAT - Taxscan

The Customs, Excise, Service Tax Appellate Tribunal (CESTAT) while upholding the order of the commissioner held that the composite contracts are undertaken by the appellant prior to June 1, 2009, need to be classified as ‘Commercial Construction Service’ and no refund can be allowed on work contract services.

The appellants, M/s. Ninan Jacob Associates are registered under Service Tax for the provision of services of ‘Architect Service’ and ‘Works Contract’ service from 2003 and 2009, respectively. Disputing the classifications made by the appellant, Revenue issued a show-cause notice covering a period 2005-06 to 2009-2010 classifying the services under ‘Commercial Construction Service’, ‘Business Auxiliary Service’, ‘Renting of Immovable Property Service’ and ‘Architect Service’ and which were confirmed by the Order-in-Original dated December 10, 2012.

The applicant contended that they have entered into various works contract and have registered with Sales Tax/VAT; commissioner erred in holding that as the appellant got registered as Works Contract Service provider only with effect from June 1, 2009, the composite contracts undertaken by him prior to this date need to be classified as ‘Commercial Construction Service’.

The Tribunal consists of Judicial Member, S.S. Garg, and Technical Member P. Anjani Kumar while upholding the order of the commissioner held that the composite contracts undertaken by the appellant prior to June 1, 2009, need to be classified as ‘Commercial Construction Service’ and no refund can be allowed on work contract services.

“We find that no service has been rendered by the appellant to the clients of the appellants in relation to the promotion of business or marketing of the goods. Therefore, we hold that demand on this count is also not sustained,” the tribunal said.

The tribunal observed that the appellant has correctly paid service tax under the ‘Works Contract’ service, there would be no cause for a refund. All the demands raised, however, are not sustainable.

To Read the full text of the Order CLICK HERE
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