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2019 (7) TMI 1785 - CESTAT KOLKATANon-imposition of penalty by the adjudicating authority - works contract service - construction of complex service or a contract which involved both rendition of service and transfer/deemed transfer of the materials used in the construction - HELD THAT:- The Hon’ble Apex Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] held that “works contract” is a separate specie of contract known in the commercial parlance and it cannot be equated with sales of goods or with the services. Therefore, it can be charged to service tax only when the charge has been created on “works contract services” and not before. Accordingly, no service tax can be levied on works contract service prior to 01.06.2007 on any service rendered along with transfer/deemed transfer of goods - The legal position, which is now well settled is that if the services are rendered along with transfer/deemed transfer of goods, such contract can only be charged as “works contract service” under Section 65 (105) (zzzza) with effect from 01.06.2007 if such contract falls within this clause. They cannot be charged the service tax under any other Head either prior to 01.06.2007 or thereafter. It could not be able to make out in this case from the records whether in the contract in question, there was deemed/transferred of materials also along with rendition of services. If so, the contract squarely falls under works contract services and can be charged under this Head only. If it does not fall under “Works Contract Service”, then no tax can be levied under this or any other head. On the other hand, if the contract pertains to service simplicitor and involves no transfer/deemed transfer of materials, then it can be charged to service tax under construction of complex services. Consequently, the demand needs to be re-worked along with interest and penalty also needs to be re-calculated. Matter remanded back to the original authority to decide the issue afresh after examining the nature of contract in the case and following the ratio laid down by the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. - appeal allowed by way of remand.
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