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2018 (9) TMI 2086 - AT - Service TaxClassification of services - project/ work executed for hydro-electric project alongwith material - classifiable under ‘Works Contract Service’ or under CICS - whether the said work falls under the exclusion clause under the definition of works contract service? - construction made by the respondent-assessee for educational institution (not for commercial purpose). Works contract service or not? - HELD THAT:- A perusal of the order in original and other documents shows that contracts in dispute are composite contracts in which both goods are supplied and services are provided. Further on the composite nature of contracts, involving supply of goods and services, there is no dispute raised by the Revenue. The issue that composite contracts involving supply of goods and services, are ‘works contract’ has been settled by the Apex court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT]. Further, the Hon’ble Supreme Court has held that only contracts of service simpliciter without involving goods, will be covered in the sub clauses of 65(105) - thus, the service in dispute which are composite in nature, are correctly classified under ‘works contract service’. Commissioner has correctly dropped the demand for the period prior to 01.06.2007 as the works contract were not taxable prior to 01.06.2007. For the period post 01.06.2007 also demand cannot be confirmed under ‘Commercial or Industrial Construction service’ under which demand was proposed in the show cause notice, as such lead will cover only service contract simpliciter, not the composite contract. Thus, the demand is not maintainable under ‘Commercial or Industrial Construction service’ for the entire period in dispute. Whether the construction of Hydro Electric project is not in respect of tunnels or dams, and thus not excluded from entry of ‘Commercial or Industrial Construction Service’ or ‘works contract service’? - HELD THAT:- In the present case in the order in original, the Commissioner has discussed in detail that services in question are in respect of dams and tunnels. Since the services provided in dispute are in respect of dam and tunnel, the same is excluded from the definition of ‘Commercial or Industrial Construction Service’, and not taxable. Thus, the order passed by the Commissioner is correct and maintained, on this issue. Demand of service tax on construction of educational institute - HELD THAT:- Revenue has not appreciated the definition of Commercial or Industrial Construction service. A perusal of definition shows that to decide the taxability under said service, user of the building, so constructed, is relevant. Clarification has been issued by CBEC Circular No. 80/10/2004-ST, dated 17.09.2004, wherein it is clarified that leviability of service tax would depend upon whether the building or civil structure is used or to be used for commerce or industry - Revenue in the appeal has not produced any evidence to show that building constructed by the Respondent are not used for educational purpose and same are used for commercial purpose. In the absence of any evidence, the finding of the Commissioner is correct and maintained. Moreover, the ground on which appeal is filed is not sustainable in terms of the definition itself. The appeals filed by the Revenue are dismissed and cross-objection filed by the respondent is disposed of.
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