2026-VIL-1727-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Supply of ready mix concrete produced at a batching plant - Abatement under Rule 2A of Service Tax (Determination of Value) Rules, 2006 - Appellant supplied ready mix concrete produced at a batching plant to a contractor for its project site and paid service tax after availing abatement of 60% of the gross contract value - Revenue issued a show cause notice for differential service tax under the extended period, which was confirmed by the Assistant Commissioner and upheld by the Commissioner (Appeals) - Appellant contended that the activity of producing ready mix concrete amounts to manufacture covered under Section 66D(f) of Finance Act, 1994, that the contract was in the nature of a works contract as cement was supplied by the service recipient, and that the service tax already paid has to be allowed - Whether the Appellant is liable to pay differential service tax on the activity of supplying ready mix concrete - HELD - The Supreme Court in Larsen & Toubro Ltd. held that concrete produced at batching plants using cement, aggregates and water with admixtures and delivered by transit mixer is a manufactured, marketable commodity - The Appellants are therefore manufacturing an excisable product and were required to pay Central Excise duty. However, they paid service tax after availing abatement, and the amount of service tax paid is much higher than the amount that would have been paid as Central Excise duty. The interest of Revenue is therefore more than taken care of. Even from the perspective of service tax, the service being in terms of a works contract, the abatement has been correctly availed. Once it is held that the services provided are works contract services, Rule 2A comes into picture and the taxable value is determined after allowing abatement as provided - The impugned order is not legally sustainable and is set aside, and the appeal is allowed - Service Tax - Demand based on Form 26AS data - Verification of consideration received for taxable service - Appellant contended that the entire differential receipts reflected in Form 26AS cannot be treated as the value of taxable services without establishing that the same represent consideration received for a service rendered - Whether the demand adopting figures in Form 26AS without verification can be sustained - HELD - The SCN was issued by adopting the figures reflected in the Form 26AS statement. Revenue has not made any effort to verify whether the amount related to any consideration received by the Appellant towards rendering of any taxable service - The impugned order is not legally sustainable and is set aside, and the appeal is allowed.
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