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2022 (1) TMI 393 - AT - Service TaxLevy of service tax - construction service or not - commercial service rendered by the appellant for construction of Paryatak Bhavan of the Andhra Pradesh Tourism Development Corporation Ltd. - suppression of facts or not - penalty - whether service tax could be levied for the period prior to 01.06.2007? - HELD THAT:- Service tax could only have been demanded on ‘works contract’ services after introduction of a charge on a ‘works contract’ service and not under any other head. This is what was observed by the Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT]. The Supreme Court examined as to whether ‘works contract’ service can be classified under section 65(105)(zzzh) as ‘construction of complex’ service and held that the scope of section 65(105) (zzzh) is limited to cover contract of service simplicitor only and not a composite ‘works contract’. The Supreme Court noticed that a “works contract” is different from a contract for service simpliciter and that it is only w.e.f 01.06.2007 that section 65(105)(zzzza) was introduced to cover composite ‘works contract’ and so works contract cannot be covered under any other category of services prior to 01.06.2007. It is, therefore, clear from the aforesaid judgment of the Supreme Court in Larsen & Toubro that a composite works contract cannot be taxed under ‘construction services’ under section 65(30a) or under ‘commercial or industrial construction service’ under section 65(25b) of the Finance Act, prior to 01.06.2007 as the scope is limited to cover contract of service simplicitor only - Even post 01.06.2007 service tax could not have been confirmed under ‘works contract’ service. The show cause notice alleged that the appellant was providing ‘construction services’ or ‘commerical or industrial construction service’ and the demand has also been confirmed under this category by the adjudicating authority. The impugned order, therefore, deserves to be set aside for post 01.06.2007 period also since the demand made under a particular category of service found to be incorrect in a subsequent proceeding, cannot be sustained. It is not necessary to examine the contention raised by learned counsel for the appellant relating to the demand being barred by limitation - Appeal allowed - decided in favor of appellant.
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