TMI Blog2018 (11) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... d only if the activities are in the nature of services‟ simpliciter. Appeal allowed - decided in favor of appellant. - Appeal No.ST/280, 281/2012 - FINAL ORDER No. 42661-42662/2018 - Dated:- 11-10-2018 - Shri. Madhu Mohan Damodhar, Member (Technical) And Shri. P. Dinesha, Member (Judicial) Ms. Radhika Chandrasekar, Advocate For the Appellant Shri A. Cletus, ADC (AR) For the Respondent ORDER Per P. Dinesha The appellant is engaged in the business of development of residential projects and the appellant enters into a composite contract with its customers. The revenue entertained a doubt, show caused and demanded the duty under construction of residential residential complex as against the services of works contract. Admittedly the dispute relates to February 2009 to June 2010. 2. Today when the matter came up for hearing, Smt. Radhika Chandrasekar, Advocate appeared for the assessee / appellant and Sh. A. Cletus, Ld.DR appeared for the revenue. Ld.Advocate submitted that the dispute involved has already been set to rest by this very bench of the Tribunal of CESTAT in the case of Real Value Promotors P Ltd and others in F.O.Nos.42436-42438 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 65(105)(zzzza) ibid. It is possibly with this intent in mind that the lawmakers have included in the definition of works contract, erection and commissioning service, commercial or industrial construction service, construction of complex service and in addition turnkey projects including EPC projects within the definition of Works Contract Service. 7.9 At this juncture, it is worthwhile to reproduce excerpts from the Union Finance Minister s budget speech in 2007:- State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the words contract . 7.10 The issue was analyzed by the Hon ble Apex Court in Larsen Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be adopted as discussed above will have to be taken into account. 7.13 We find sustenance in arriving at this conclusion by a number of decisions of the Tribunal in which it has held as under:- a. In the case of Commissioner, Service Tax, New Delhi Vs. Swadeshi Construction Company - 2018-TIOL-1096-CESTAT-DEL, the Tribunal in para 7 has held as under:- 7. We note that in the present case, the SCN was issued on 27.05.2011. On that date, both the tax entries, namely, Commercial or Industrial Construction Service and Works Contract Service, were available in the Finance Act, 1994. The SCN did mention this in the first para itself. However, the proposal for tax demand was specifically made under Commercial or Industrial Construction Service under Section 65 (105) (zzq) of the Finance Act, 1994. In such situation, we note that it cannot be a case of simple mentioning of wrong provisions of law as submitted by the Revenue. Apparently, the tax liability of composite works contract is to be considered under works contract services only as per legal position settled by the Hon'ble Apex Court in M/s L T Limited. Even in the appeal, the Revenue submitted that the respondent we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of properly in goods transferred in the execution of a works contract. 10.In view of this specific decision and the admitted claim of the appellant that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of around ₹ 82 lakhs under this category after the visit of the departmental officers and therefore an amount of ₹ 36,88,611/- demanded in the impugned order should be considered as having been discharged. We find merit in his argument and hence the demand of ₹ 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have to be discharged by the appellants. So ordered. 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service in the light of the Hon ble Supreme Court judgment in Larsen Toubro (supra) upto 1.6.2007 b. For the period after 1.6.2007, service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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