2026-VIL-1753-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Classification, Point of taxation - Tax payable on receipt basis and not on accrual - Show Cause Notice issued under Commercial or Industrial Construction Service - Plea that the services rendered were Works Contract Service - Demand for the period 2006-07 to 2008-09 under Commercial or Industrial Construction Service - Appellant contended that many of its contracts were completed much before the period and should not have been included in arriving at the demand, and that the SCN was time barred for most of the period - Whether the demand was correctly quantified, having regard to the amounts actually received during the period - HELD - It is seen from the Table in the Show Cause Notice that the audit team considered that the Appellant supplied both goods and services, and therefore gave abatement on account of the materials used. There is not much substance in the argument that the SCN is erroneous because of the category under which it was issued - The contention of the Appellant on this ground is rejected - During the period involved, the service was taxable on receipt basis, and service tax is to be discharged on the receipt of the amount. It is required to be found out what amounts were received as consideration during the period. If any amount pertains to services rendered before the service tax provisions came into place for Commercial or Industrial Construction Service, the same would not be liable to any tax - Service tax is payable only on the actual receipts and not on the basis of accruals during the period under consideration. For the limited purpose of checking when the contracts were entered into and completed and when the amounts were received, the matter is to be remanded for re-quantification, with due consideration to the documentary evidences - the appeal is disposed of by way of remand.
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