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2022 (7) TMI 1184 - AT - Service TaxClassification of services - designing and constructing office interiors, customized exhibitions booths/stalls, television studios and retail fit outs - services classified as erection, commissioning and installation service and commercial or industrial construction service prior to June 01, 2007 - works contract service or pandal and shamiana services - demand of differential duty along with interest and penalty - HELD THAT:- It is undisputed that the services provided by the appellant were on turnkey basis and a composite amount is charged by the appellant for its services and for the goods used in providing them. It is undisputed that the appellant treated this as works contract services and paid VAT to the respective State Governments as appropriate. The appellant had classified these services with effect from 1.6.2007 under the head “works contract service” and had classified them under the heads of “commercial or industrial construction service” and “erection commissioning or installation service” prior to this date and paid service tax. Even while paying service tax under these heads before 1.6.2007 the appellant had claimed abatement as available under various notifications. It has been settled by the Supreme Court in the case of Larsen & Toubro that composite works contract services involving supply of goods/deemed supply of goods and rendering services are a separate species of contract known to commerce and must be treated as works contract services only. Such services become taxable under the head of works contract service under Section 65(105)(zzzza) of the Finance Act, 1994 with effect from 1.6.2007. Prior to this there was no charge of service tax on works contract services. Therefore, there was no levy of service tax on such composite services under any other head before 1.6.2007. Since it is undisputed that the appellant’s contract involved provisions of services as well as supply/deemed supply of goods they can only be classified under the head “works contract services” as per the law laid down in Supreme Court in Larsen & Toubro. Such services could not have been charged with service tax under any other head either before or after 1.6.2007. The show cause notices demanding service tax under the head “Pandal and Shamiana services” from the appellant, therefore, cannot be sustained. Appeal allowed - decided in favor of appellant.
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