By TIOL News Service

NEW DELHI, FEB 05, 2018: THE dispute is with reference to the liability to Service Tax for provision of bunk-houses for M/s.Cairns Energy India Pvt. Ltd.

The Revenue viewed that the said services constitute ‘Supply of tangible goods service'. It was held that the Bunk-houses are goods which are supplied by the appellant for a consideration.

The demand of Rs.4,91,861/- was confirmed alongwith penalties and the order was upheld by the Commissioner(A).

The appellant is before the CESTAT and submits that in terms of service order received from the client, M/s.Cairns Energy India Pvt. Ltd. they have provided bunk-houses with all the required facilities at the site ear-marked by the client. It is further informed that at first there is a concrete platform built by the appellant on which a row of bunk-houses were erected by assembly and integration for use by the client for accommodation of executives and employees. The service order also clearly mentions that the bunk-houses which are semi-super-deluxe facilities are provided by the appellant alongwith incidental service of house keeping, breakfast, dinner etc. Photographs of such bunk-house facilities was also shown to the Bench. Inasmuch as the whole facility of bunk-house is created at site and there is no ready built bunk-house supplied by the appellant.

The AR submitted that bunk-house is a movable property and is easily moved from place to place depending on the requirement and the fact that these are not supplied in a fully assembled condition will not take away the liability from service tax under the category of Supply of tangible goods.

The Bench observed –

++ The nature of bunk-houses can be seen from the sample photographs submitted by the appellant. It is seen that in a concrete pavement, a row of accommodation facilities have been created at site. Admittedly, concrete and paver block flooring are to be made in the designated premises.

++ Thereafter the accommodation in the form of bunk-house are assembled/erected as per the requirement of the client. Additional facilities like washbasin, plumping etc. are provided in the said facilities.

++ It would appear that the whole bunk-house system integrated in row of accommodation with all connected facilities for the human habitation is created at site in the premises designated by the client. The service order identifies the payment as hiring of bunk-house in Barmer.

++ The crucial difference is that the appellant is claiming these are accommodations created at site. The Revenue is claiming that these are tangible goods supplied by the client. Looking into the nature of construction and accommodation under the terms of service order, we are of the considered view that these bunk houses are in fact created on concrete platform at site with various components and accessories and as such, there is no "supply of bunk-house" to be called supply of tangible goods in the present arrangement.

++ The bunk-house accommodation is created at site based some on permanent concrete base with some dismantable components. In such situation, we note that there is no identified supply of bunker-houses as considered by the lower authorities.

The impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-434-CESTAT-DEL)