Contracts involving both supply of materials and services are classified as 'Works Contract Service'. In the absence of a specific tax levy on 'Works Contract Service' during the relevant period, the demand for service tax on such activities is legally unsustainable.

FINAL ORDER NO.75477/2026

Order: [PER SHRI K. ANPAZHAKAN]

The present appeal has been filed against the Order-in-Original No. 15/ST/Commr/Denovo/2018 dated 24.08.2018 passed by the Commissioner of CGST & Central Excise, Patna-I Commissionerate Central Revenue Building, Birchand Patel Path, Patna-800 001, wherein the Ld. Commissioner has confirmed a demand of service tax along with interest and penalties.

2. The instant proceeding had been initiated consequent upon the Order No. FO/A/75173/2014 dated 01.05.2014 of the Tribunal, Kolkata, wherein the Tribunal has remanded the matter to the adjudicating authority for fresh consideration and decision on all issues involved, in view of the observations made in the said order. The impugned order has been passed as directed by the Tribunal.

3. The facts of the case are that the appellant has been registered with the Service Tax Department for providing the services of "Business Auxiliary Service", "Commissioning and Installation", "Civil Construction Service" and "Maintenance & Repair Service". Two Show cause notices under C. No.- V 17/B'pur/SCN Cell/Service Tax/Adjn/2008/2304 dated 18.03.2009 and C. No.-V-35/B'pur/SCN Ceil/ST/Adjn/2010/9584 dated 08.10.2010 were issued to the appellant demanding service tax, including Ed. Cess and S&H Ed. Cess, amounting to Rs. 1,13,76,993/- & Rs. 6,60,11,878/- respectively. and interest amounting to Rs. 2,031/- and Rs. 48,315/-respectively for the period Oct, 2004 to 2007-08. The Notices alleged that the appellant has suppressed the value of the taxable services provided by them to M/s NTPC. In the SCN dated 8.10.2010, it has been alleged that M/s NTPC had paid higher amounts to the appellant for commissioning and installation work rendered by them, but the appellant had declared to the department lesser value amounting in their ST-3 returns and paid lesser service tax. In the SCN dated 8.10.2010, it was alleged that the appellant has also rendered Construction Service in addition to Erection, Installation and Commissioning Service and paid lesser service tax on both the services rendered.

3.1. On adjudication, the Ld. adjudicating authority confirmed the demand of service tax along with interest and penalty. On appeal, the Tribunal, Kolkata remanded the matter to the adjudicating authority, with the following observations:

We find that the issue involved in the present case relates to admissibility of abatement from the gross taxable value received by the Appellant on account of rendering services to M/s. NTPC. The dispute lies on the fact that the Appellant had claimed that they had rendered both "Installation & commissioning" as well as "civil construction services", in accordance with the contract with M/S.NTPC dated 29.03.2004 and availed CENVAT Credit on the inputs/input services relating to 'installation & commissioning servicves' and availed abatement for rendering civil construction services. The Revenue disputes the said fact alleging that they have not rendered civil installation and construction but rendered only services, commissioning services for which they have availed CENVAT Credit on the inputs, thus, the benefit of abatement under Notifications, namely, case may be, are not applicable, 15/2004-ST dated 10.09.2004 and 1/06-ST dated 01.03.2006, as the Prima facie, we find that the conclusion of the Id. adjudicating authority rests on a letter issued by M/s. NTPC dated 23.11.2011. We also find that after goes completion of the adjudication proceeding, the Appellants had also obtained a letter from M/s. NTPC, whereby, it is clarified that the services rendered by the Appella