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2014 (7) TMI 1020 - AT - Service TaxClassification of service - Works Contract service or erection commissioning or installation service - nature of contract is pure labor contract or not - Held that - The appellants have from their records show that almost 31% of the contract value is represented by material value. - The assumption appears to be that in the said Service contract entered into by appellants with Power Grid Corporation of India Ltd. there is no transfer of property in goods. This assumption is based on incorrect appreciation of facts. The records shown by appellants indicate that a significant percentage of the total contract work under the Service Contract involves material component. Therefore we hold that there is transfer of property in goods involved in the execution of the Service Contract. - Decided in favor of assessee. The appellants pay Sales Tax/Vat on the transfer of property in the goods involved in execution of the Service contract. Copies of VAT returns have also been placed on record. Therefore the second aspect that goods in the Service Contract are leviable to tax as sale of goods is also fulfilled. Benefit of composition scheme - Held that - it is quite clear that from 7.7.2009 the Composition Scheme was restricted to such Works Contracts where the value of goods used whether supplied under any other contract is to be included. The change in Rules is not a mere clarification of the earlier Rules. There has been a clear amendment in law from 7.7.2009. The period of dispute in the case of appellant is from April 2008 to March 2012 and Revenue does not dispute that the contract had commenced before 7.7.2009. Therefore the amended Rules would not apply in the case of appellant in accordance with the proviso to the Explanation in the amended Rules - appellants have correctly availed the Works Contract (Composition Scheme for Payment of Service Tax) Rules 2007. - Decided in favor of assessee.
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