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2018 (10) TMI 218 - AT - Service TaxErection, commissioning and installation services - services provided to Jaipur Vidhyuth Vitharan Nigam Limited (JVVNL), Jaipur - Providing & Fixing of Street Lights on PCC Pole or otherwise i.e. work in relation to lighting on public utility road - Electrification and Lighting - Shifting of overhead cables/ wires and laying of cables under or alongside roads - CBEC Circular No. 123/5/2010-TRU dated 24th May, 2010 - Composition Scheme - Composite Work Contract prior to 1st June, 2007 - time limitation. Taxability - Providing & Fixing of Street Lights on PCC Pole or otherwise i.e. work in relation to lighting on public utility road - Electrification and Lighting - Shifting of overhead cables/ wires and laying of cables under or alongside roads - Held that:- Applying the Circular to the services still confirmed by the adjudicating authority below, we observe that the providing and fixing of streetlights is taxable. Therefore, the demand for the said category is held to have rightly been confirmed - Electrification is covered under clause 7 of the above Circular as taxable work. Therefore, this demand is also held to have rightly been confirmed - However, shifting of overhead cables/ wires or along side roads for any reason as widening/renovation of the roads is specifically not taxable as per entry No.1 of the said Circular. Benefit of Composition Scheme and cum-tax benefit - Held that:- The work orders are perused. It becomes clear that these are not the work orders for the services simplicitor or for sale of goods simplicitor but involves both the elements in such a manner that the contracts are indivisible - the contracts are opined to fall under the category of works contract services. It has also been observed that the introduction of work contract service came w.e.f. 1st June, 2007. Even the adjudicating authority has acknowledged the activity of the appellant to be covered under para (a) & (e) of sub clause (ii) of the definition of works contract service. But despite the said findings, the Commissioner is opined to have committed an error while holding that with the introduction of work contract service classification of certain services could undergo a change and merely because certain services got covered under works contract service, it does not necessarily mean that the same service was not classifiable under any other pre-existing taxable category i.e. errection, commissioning or installation services. Composite Work Contract prior to 1st June, 2007 - Held that:- The service which is in the nature of Composite Work Contract cannot be put to tax before 1st June, 2007. Hence, the entire demand confirmed by the adjudicating authority for the period prior to 2007 is held to have wrongly confirmed. The same is hereby set aside. However, for the subsequent period, since the activity is work contract service and there is a Composition Scheme as per the provisions of Composition Rules issued under Notification 32/2007 dated 22nd May, 2007 vide which an option is available to pay Service Tax at the rate of 2 % upto 1st of March, 2008 and at the rate of 4 % w.e.f. 1st of March, 2008 on the gross amount charged for the works contract instead of paying the regular duty. The appellant is entitled to opt for Composition Scheme. The said benefit is denied by the adjudicating authority below merely on the ground that the appellant has failed to exercise the said option prior to the payment of Service Tax in respect of the respected works contract, but to our opinion, that is merely a procedural lapse - Otherwise also Composition Scheme is a beneficial legislation and the inclination shall always be in favour of the assessee in case of any legislation benefiting him. The commissioner is therefore opined to have committed a mistake while declining the said benefit. But, simultaneously it is also apparent on record that the regular duty applicable was 10.3% whereas the appellant has paid the said duty at the rate of 12.3%. This means that the appellant opted to not to pay under Composition Scheme. Time limitation - Held that:- Though the Department has taken the plea that there is a clear recital in the order under challenge about the appellant to have been non-cooperative while providing the documents but the meticulous table in the order itself falsifies that argument and there is observed no other act of appellant on record of alleged non-cooperation. Otherwise also the activity was of composite nature and was not simplicitor of errection, commissioning or installation - Hence, appellant is held to have a bonafide impression of no tax liability. As a result, the Department is held not liable to invoke the extended period of limitation. The confirmed demand can be confined only for the year 2009-10. The major drop of the demand otherwise has not challenged by the Department. The order with respect to the demand for the year 2009-10 as mentioned in chart in Order-in-Original except for the demand of ₹ 2,66,303/- for Railway, Ajmere is hereby upheld - Rest of the demand has though taxable but is hereby set aside being barred by time - Appellant is held to be entitled for the benefit of Composition Scheme but is observed to have not opted for it. Appeal allowed in part.
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