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2020 (2) TMI 1396 - AT - Service TaxCommercial or Industrial Construction Service - composite contract wherein construction has been made by the appellant for Government organizations - period prior to 01.06.2007 - Construction for Indian Navy, being flats construction for their personnel (MAP) - Demand as regards construction to Seawood apartments - Penalties. Commercial or Industrial Construction Service - composite contract wherein construction has been made by the appellant for Government organizations - period prior to 01.06.2007 - HELD THAT:- This issue is settled in favour of the appellant as the Hon’ble Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] has held that a composite contract is works contract service w.e.f. 01/06/2007 - also, there is no proposal by the Revenue to classify the said activity under Works Contract Service. Thus, prior to 01.06.2007, the activity is not taxable. Construction for Indian Navy, being flats construction for their personnel (MAP) - HELD THAT:- As such flats / apartments were not made for sale and construction is for one principal (the Ministry of Defence), the same is held to be not taxable in view of the law as clarified by the Board vide Instructions F.No.137/12/2006-CX.4 dt. 29/01/2009 (Circular No.108/2/2009- ST). Demand as regards construction to Seawood apartments - HELD THAT:- The appellant is not entitled for the 67% abatement under the said notification. However, the appellant is entitled to deduction of material component actually used by them in construction of the projects - Seawood Apartment. Appellant have also submitted that they are registered under the provisions of State VAT and they have maintained proper accounts of the material used in the project - Accordingly, this issue is remanded to the file of the original adjudicating authority to allow abatement or deduction of actual quantity/amount of material used in the construction, as per the records of the appellant. Appellant is also directed to produce the calculation of such material used by them along with the Chartered Accountant certificate and shall also produce other relevant records like VAT assessment order, etc. as required for proper determination - matter remanded only for the purpose of requantification of service tax in respect of Seawood Apartment only. Penalties - HELD THAT:- All penalties are accordingly set aside. Appeal allowed in part and part matter on remand.
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