The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the indivisible contracts that fall under the category of works contract service are liable for service tax with effect from the date of 01.06.2007.
Interarch Building Products Pvt. Ltd, the appellant assessee had centralized registration under the Finance Act under ‘commercial or industrial construction services’ and ‘construction services’ and entered into contracts with consumers for execution of contracts in respect of pre-engineered or prefabricated buildings/structures and paid service tax on the gross amount of the contract under the category ‘commercial or industrial constructions service’ made taxable under section 65 (105)(zzq) of the Finance Act 1994.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demands raised and for rejecting the availability of CENVAT credit and directed for its recovery.
V. Raghuraman, the counsel for the assessee contended that the assessee had been regularly filing the half-yearly returns and the demand was based only on the information declared returns and the other statutory prescribed records maintained by the assessment.
Also submitted that the contention was that the assessee had not resorted to non-declaration of facts or information in the returns, nor there was any failure on the part of the assessee to furnish any information required to be disclosed in the returns. Thus, there was no suppression of facts, much less willful suppression with an intent to wrongly avail of CENVAT credit.
Santhosh Kumar, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had wilful suppression of facts with an intent to wrongly avail CENVAT credit and the demand raised by the revenue was as per the law and liable to be sustained.
The Bench observed that in the case of Commissioner of Central Excise vs. Larsen and Toubro, the court held that the indivisible contracts are liable to service tax under ‘works contract’ which was introduced with effect from the date of 01.06.2007.
The two-member bench comprising Dilip Gupta (President) and Hemambika Priya (Technical) quashes the demand raised by the department while allowing the appeal filed by the assessee.
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