CESTAT | Can demand of Service Tax be levied under commercial services involving composite contracts? Tribunal answers

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Division Coram of Sulekha Beevi (Judicial Member) and P Venkat Subbarao (Technical Member) allowed an appeal made in pursuance of an impugned order which allowed levy of service tax on construction services involving composite contracts consisting of material + service. The appellant had not discharged service tax on the consideration received by them for the construction services. Following which a SCN was issued and interest and penalty was charged.

 By the virtue of the following appeal in this court, the counsel for the appellant contended that being composite contracts, the demand under Commercial or Industrial Construction Services cannot sustain in the legal process. This proposition was supported by decision of the Tribunal in the case of India Guniting Corporation v. Commr. Of Central Tax, 2021 (52) G.S.T.L. 174(Tri.-Del.) and Real Value Promoters v. GST. In response to the appellant’s contentions, the department had not put forward any evidence to establish any positive act of willful suppression or mis-statement against the appellant.

The Tribunal relied upon the decision of the Supreme Court in the case of CCE & C v. Larsen & Toubro Ltd., 2015(39) S.T.R. 9013(S.C.)., while upholding the arguments of appellant, the Tribunal accepted the appeal and set aside the impugned order with consequential relief.[SS Constructions v. CCE & ST, 2021 SCC OnLine CESTAT 2680, decided on 10-12-2021]


Suchita Shukla, Editorial Assistant has reported this brief.

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