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2019 (7) TMI 503 - AT - Service TaxConsulting Engineer service - Non-payment of service tax - Appellant is collecting erection and commissioning charges which were shown under job work receipts and the same are chargeable to service tax w.e.f. 1.7.2003 - demand alongwith interest and penalty - period 1.7.2003 to 9.9.2004 - demand under Works contract service for the subsequent period - Change in classification of services - Scope of SCN. HELD THAT:- The Appellants during this period were engaged in the erection of transmission towers. The facts of the case show that the Appellant during the relevant period, were engaged in the supply of electricity transmission towers as well as rendering services of erection of the same. Such services would undoubtedlymerit classification under Works Contract Service. From the assessment order passed by the VAT authorities for the impugned period, it is found that the Appellant’s services were classified under Works Contract under Gujarat VAT. The Hon’ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] has held that Works contracts are not liable for service tax for the period prior to 01.06.2007. Also by virtue of Notification No. 45/2010-ST dated 20.7.2010, exemption was granted from payment of service tax to any service in relation to transmission and distribution of electricity - Undoubtedly the services rendered by the Appellant were related to erecting towers for transmission of electricity and hence merits exemption by virtue of subject Notification. During the impugned period, the activity of only commissioning and installation was taxable and only from 10.9.2004, the services of erection were included /adduced to commissioning and installation service so as to make the same taxable. The same is explicit from the CBEC Circular No. 59/8/2003-ST dated 20.6.2003. Demand under Works contract service for the subsequent period - for the subsequent period, the Revenue authorities have themselves classified the service under the category of works contract for the same activity - HELD THAT:- In view of facts of the case, the Hon’ble Apex Court order in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] and Tribunals order as well as CBEC circulars, Notifications issued under Section 11-C of Central Excise Act, we hold that the services of erection rendered by the Appellant during the impugned period are not liable for service tax. Change in classification of services - scope of SCN - HELD THAT:- In the show cause notice, the demands were made under the category of Consulting Engineer, whereas in the impugned order, the demands were made under the category of erection services, which amounts to change of classification. Clearly, the demand has traveled beyond the scope of show cause notice as no demands were made under the category of erection service - for this reason also demand is not sustainable. Appeal allowed - decided in favor of appellant.
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