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2021 (2) TMI 400 - AT - Service TaxWorks Contract - Classification of services - Scope of Show Cause Notice (SCN) - whether the projects undertaken by the appellant would fall in the classification alleged in the show cause notices or would be more appropriately classifiable under “works contract”, if the contracts involved both goods as well as services? - HELD THAT:- The Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] noted that a “works contract” is different from a contract for service simpliciter and could be subjected to service tax only with effect from June 1, 2007. The Commissioner has recorded a categorical find that each of the “works contract” undertaken by the appellant are not covered under the three services namely (i) commercial or industrial construction, (ii) construction of complex and (iii) management, maintenance or repair mentioned in the first show cause notice. The Commissioner further recorded a categorical finding that the activities undertaken by the appellant would be classifiable as “works contract” as they involved goods as well as labour services - The Commissioner therefore, dropped the demand for the period prior June 1, 2007. But for the demands for the period w.e.f. June 1, 2007 the Commissioner proceeded to examine whether the particular work performed under “works contract” is exempted from levy of service tax under Notifications issued from time to time. A Division Bench of the Tribunal in M/S GURJAR CONSTRUCTION VERSUS COMMISSIONER CENTRAL EXCISE, JAIPUR-II [2019 (5) TMI 717 - CESTAT NEW DELHI] also examined such a position and observed that a demand made under a particular category cannot be sustained under a different category - In view of the aforesaid decisions of the Tribunal, it has to be held that the Commissioner was not justified in confirming the demand of service tax under the category of “works contract” for the period post June 1, 2007 even if the levy of service tax was not exempted under Notifications, since, the show cause notice that demand it service tax under the three categories namely (i) commercial or industrial construction, (ii) construction of complex and (iii) management, maintenance or repair. The order dated January 31, 2018 passed by the Commissioner that has confirmed the demand of service tax, therefore, deserves to be set aside and is set asid - appeal allowed - decided in favor of appellant.
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