2025-VIL-1501-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Benefit of Abatement, Composite Works Contract, Finishing and Completion Services or "original works" – Revenue alleged that the appellant had wrongly availed the benefit of abatement as they did not include the value of all materials used by them in execution of such works. Further, the revenue authorities contended that the appellant's work of electrical, sanitary, flooring, tiling etc. in relation to a residential complex should be considered as "finishing and completion services" and not "original works", and therefore, not eligible for 60% abatement - Whether the appellant is liable to pay service tax for the period prior to the amendment introducing the definition of "Works Contract" under the Finance Act, 1994 – HELD - The Supreme Court in the cases of Larsen & Toubro Ltd. and Total Environment Building Systems Pvt. Ltd. has held that for the period prior to the amendment introducing the definition of "Works Contract" under the Finance Act, 1994, service tax was not leviable on the indivisible/composite works contracts. The Tribunal, following the Supreme Court decisions, held that the appellant was not liable to pay any service tax for the pre-amended period and the issue of levy of exemption notification would also not apply – Further, the nature of work carried out by the appellant involves not merely cosmetic finishing work but also extensive work in terms of making the building habitable, and therefore, the appellant's work should be considered as "original works" and not merely "finishing and completion services". Accordingly, the appellant would be entitled to 60% abatement and service tax has to be paid only on 40% of the value - the impugned order is set aside and appeal is allowed
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