2023 (5) TMI 569 - AT - Service Tax

Classification of services - Works Contract Service - vivisectible composite contract or a service contract simplicitor - Revenue re-classified the services rendered from Commercial or Industrial Construction Services to works contract service - CBEC Circular No. 98/2007-ST dated 04.01.2008 - entitlement to avail the composition scheme - HELD THAT:- A plain reading of the contract brings out the fact that a certain amount of material is involved and that the appellant was required to pay VAT etc. on the same and that an advance at the rate of Rs. 2400/per 1000 bricks would be paid to the appellant. It is clear that it talks of the involvement of material and it does not provide for the bifurcation of the material and service portion. Therefore, it has to be concluded that the contract is a composite one and not vivisectible and therefore, qualifies to be works contract. The department’s objection that the contract is not dated will not help the cause of revenue.

In view of the Hon’ble Apex Court judgment in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] reiterated in M/S. TOTAL ENVIRONMENT BUILDING SYSTEMS PVT. LTD. VERSUS THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES & ORS., YFC PROJECTS PVT. LTD. VERSUS UNION OF INDIA, M/S. G.D. BUILDERS VERSUS UNION OF INDIA & ANR., M/S. NATIONAL BUILDING CONSTRUCTION CORPORATION LTD. (NBCC) VERSUS UNION OF INDIA & ANR., M/S. UNITECH LTD. VERSUS UNION OF INDIA & ORS., M/S. NATIONAL BUILDING CONSTRUCTION CORPORATION LTD. (NBCC) VERSUS UNION OF INDIA & ORS., M/S. LARSEN AND TOUBRO LTD. VERSUS COMMISSIONER OF SERVICE TAX, DELHI, COMMISSIONER OF SERVICE TAX MUMBAI - II VERSUS M/S. IOT INFRASTRUCTURE & ENERGY SERVICES LIMITED, M/S. L&T HYDROCARBON ENGINEERING LIMITED (PREVIOUSLY KNOWN AS LARSEN & TOUBRO LIMITED) VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [2022 (8) TMI 168 - SUPREME COURT], works contract are chargeable only from 01.06.2007. The appellants having opted to pay duty under the new scheme vide their letter dated 04.06.2007 have made themselves eligible for the composition scheme under works contract service.

Despite the fact that the appellants have accepted in the written reply, this being a question of law can be raised at any point of time, and that Substantive benefit given by legislature cannot be nullified by mere averments of the appellant.

Appeal allowed.