Service Tax
TRT-2025-
Cestat-New Delhi
Date:-27-08-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order date – 27 July 2022
Facts
- The appellant, M/s Sconce Global Private Limited is engaged in the business of setti ng up stalls for various companies at exhibitions.
- The appellant had classified its services under the head of erection, commissioning and installation service and commercial or industrial construction service prior to June 01, 2007 and it has classified them as “works contract service” after June 01, 2007 when Section 65(105)(zzzza) was introduced as a separate taxable service in the Finance Act, 1994.
- The department demanded service tax covering the period 2006- 2007, 2016-2017. All the show cause notices proposed classifying the appellant’s service under the head “Pandal and Shamiana” services and recover differential duty from the appellant.
- From 1.6.2007 appellant classified the services under the category of works contract service and discharged liability under works contract (Composition Scheme for payment of Service Tax) Rules, 2007 as applicable from time to time and had filed returns with the Department which were accepted without any objection.
- Aggrieved for the other period, the appellant filed for an appeal.
Issue
- Whether the order passed by department to classify appellant’s service under the head “Pandal and Shamiana” services justified?
Order
- The Tribunal observed that the services provided by the appellant were on turnkey basis and a composite amount is charged by the appellant for its services and for the goods used in providing them.
- The appellant’s contract involved provisions of services as well as supply/deemed supply of goods they can only be classified under the head “works contract services” as per the law laid down in Supreme Court in Larsen & Toubro. Such services could not have been charged with Service tax under any other head either before or after 1.6.2007.
- The Tribunal bench held that Service tax cannot be levied on “Pandal and Shamiana services” before 1.6.2007 since the “works contract services” could not have been charged with Service tax under any other head either before or after 1.6.2007.
- Hence, the show cause notices demanding Service tax under the head “Pandal and Shamiana services” from the appellant, therefore, cannot be sustained. Consequently, the impugned orders need to be set aside.
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