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2016 (9) TMI 634 - AT - Service TaxDemand alongwith interest and penalty - differential tax - works contract entered by appellants in April, 2007 but providing commercial and industrial construction service to their clients prior to April, 2007 also - discharged their duty liability under composite scheme at the rate of 2% in the month of April, 2007 on the advance received by them from their client - Held that:- the work contract was introduced as a taxable service with effect from 1.6.2007. The Hon’ble Supreme Court in the case of Commissioner of Central Excise, Kerala vs Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] has held that works contract were not taxable prior to 1.6.2007. Therefore, prior to the said date, there was no requirement under the law to pay any service tax. Hence, the demand of differential tax, when there was no obligation to pay any tax during the relevant period would not be sustainable. For the period subsequent to 1.6.2007, the appellant has already discharged their tax liability correctly in accordance with the composite scheme. Therefore, impugned order confirming the differential demand and interest and imposing penalty is required to be set aside. - Decided in favour of appellant
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