Order date 23 September 2022

Facts

• The Appellant, M/s N.M. Roof Designers Ltd., is in construction business. office premises of the appellant on 17.08.2012.
• During the search of the premise on 17.08.2012 it was observed that the appellant had provided taxable services such as 

1. Commercial & Industrial Construction, Construction of Residential Complex Service and Works Contract Service include Educational institute, Hospitals, Housing Board Colony, Residential Houses and other.
2. Consulting Engineer services and Supply Of Tangible Goods Services, on which the appellant had not paid appropriate service tax during the period of 01.04.2007 to 31.03.2012. 

• Hence, a show cause notice has been issued to appellant raising demand of Rs. 11,86,56,367/- and the amount already deposited to the extent of Rs. 69,70,995/- was proposed to be appropriated. 
• Order dated 19.03.2014/28.03.2014 was passed, confirming the amount proposed and imposed penalties under sections 76, 77 and 78 of the Finance Act, 1994.

Issue

• Whether the demands raised under the heads commercial or industrial construction service (CICS) ,construction of complex service (CCS) and Consulting engineer services and supply of tangible goods services are in order?

Order

• The Tribunal observed that the appellant was not only providing services but was also providing the material, which would be covered under Works Contract w.e.f 01.06.2007 as was held in the Supreme Court in Larsen & Toubro. In such circumstances, the service could not have been confirmed under any category except works contract which service which became taxable only w.e.f 01.06.2007. Thus, confirmation of the demand under CICS and CCS prior to 01.06.2007 cannot be sustained.
• For the period post 01.06.2007 the demand has been proposed in the show cause notice under works contract but it has been confirmed under CICS or CCS. It is a settled law that the demand proposed under a particular category cannot be confirmed under a different category. 
• In regard to the “consulting engineer” service, it was found that the submission of the learned counsel for the appellant is that it should have been confirmed on the amount of Rs. 1,19,96,452/- which was actually realized/received during period in issue and not on the basis of gross billing of Rs. 1,58,08,357/-. This submission of learned counsel for the appellant deserves to be accepted for the reason that the demand could have been calculated only on the amount actually realized/received during that period.
• Demand in respect of supply of “tangible goods” service relating to Vibrators and JCB Excavators provided on rent could not have been confirmed also deserves to be accepted. This is for the reason that there was a transfer of right of possession and effective control of the goods and, therefore, could not have been subjected to levy of service tax since it would amount to deemed sale under article 366(29A) of the Constitution of India.
• Hence, the impugned order is set aside except to the extent it concerns the services provided under “consulting engineer” service.
• Relating to levy of service tax on “consulting engineer” service would have to be remitted for redetermination of the amount of service tax which was the amount actually realized/received by the appellant during the period.
• Appeal is allowed to the extent of above.