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2019 (3) TMI 1504 - AT - Service TaxWorks Contract Service - Erection, Commissioning and Installation Services - levy of service tax - Held that:- The period involved is 2006-07 and it is stated therein that the works include provision of services along with supply of materials. The demand is raised in SCN and confirmed in the impugned order under ECIS. From the impugned order it is seen that the adjudicating authority has held that some of the contracts are not of composite nature observing that certain invoices only show the supply of material and VAT paid whereas certain invoices do not show materials supplied. We do not think such a vivisection can be made. The nature of the contract or work executed for the customer has to be looked into to consider whether it is a composite contract involving both supply of material and supply of service - The Hon'ble Apex Court in the case of M/s. Larsen & Toubro Ltd., [2015 (8) TMI 749 - SUPREME COURT] has held that for the period prior to 01.06.2007, the demand in respect of contracts of composite nature cannot sustain. The demands confirmed under ECIS where the works executed are of composite in nature involving both supply of materials and provision of services, the demand requires to be set aside - the entire demand under ECIS, which involves both labour and materials prior to 01.06.2007 is set aside. For the period after 01.06.2007, for all the amounts which have been confirmed under ECIS, wherein, the contracts are of composite nature involving both supply of materials and provision of services the demand cannot sustain as per the decision of the Tribunal in the case of M/s. Real Value Promoters. Pvt Ltd., [2018 (9) TMI 1149 - CESTAT CHENNAI]. As such, the demands after 1/6/2007 under the category of ECIS for composite contracts are set aside. Penalties - Held that:- The issue whether composite contracts are subject to levy of service tax was contentious during the relevant period. Taking note of this fact that the issue being interpretational one, the penalties imposed in regard to the demands confirmed under WCS after 1/6/2007 is unwarranted and requires to be set aside, which we hereby do. Thus, the penalties imposed in regard to WCS after 01.06.2007 are set aside in toto. The demand under ECIS for M/s. Dalmia Cements Ltd., is remanded for considering the cum-tax benefit - appeals are partly allowed and partly remanded.
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