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TMI Blog2016 (9) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... had confirmed the demand proposed in the show cause notice stating that the appellants had been rendering construction of complex service which is taxable from 16.6.2005, had neither registered nor paid appropriate service tax on such value received till the department started investigating their activity and consequently confirmed the tax along with interest and penalty. Aggrieved with the Order in Original dated 04.01.2008, the appellants had preferred this appeal before this Tribunal. 2. Appellants were represented by Shri J. Shankarraman, Ld. Advocate and the Revenue was represented by Shri A. Cletus, ADC, Ld. A.R. 3. The Counsel submitted that the adjudicating authority ought to have considered the basic tenet which provides for what is 'service", cannot be 'sale' and vice versa. When construction industry is subjected to 'sales tax' connoting the element of 'sale', there cannot any justification for construing the same as 'service' also. As service tax can be levied only on services, the Learned Commissioner grossly erred in subjecting the business of the appellants to ervice tax' also, over and above the burden of "sales tax', which is alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner is contrary to the ruling of the Hon'ble Supreme Court. 3.2 Further the appellants submitted that as service tax is concerned, the appellants are not liable to pay for projects executed prior to 01.06.2007 as it was the works contract and the definition of works contract was brought into service only with effect from 01.06.2007 and further submitted for waiver of penalty under section 76, 77 and 78 of the Finance Act. 4. The Learned AR appearing for the revenue reiterated the finding in the Order In original and further stated that in view of the decision of the Hon'ble Supreme Court in the case of CCE & Cus Cochin vs. Larsen and Toubro Ltd. cited supra, they are not contesting with further arguments. 5. Heard both sides. The issues to be decided in the instant appeal are as follows: (i) Whether the demand is correct on law for the period between 16/06/2005 to 31/12/2006 under taxable service of construction of complex for the indivisible works contract which merits classification under the category works contract service. (ii) Whether the facts of this case invoking extended period of limitation is correct. The appellant, in their g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. 25. In fact, by way of contrast, Section 67 post amendment (by the Finance Act, 2006) for the first time prescribes, in cases like the present, where the provision of service is for a consideration which is not ascertainable, to be the amount as may be determined in the prescribed manner. 26. We have already seen that Rule 2(A) framed pursuant to this power has followed the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracts various exclusions are also made such as works contracts in respect of roads, airports, airways transport, bridges, tunnels, and dams. These infrastructure projects have been excluded and continue to be excluded presumably because they are conceived in the national interest. If learned counsel for the revenue were right, each of these excluded works contracts could be taxed under the five sub-heads of Section 65(105) contained in the Finance Act, 1994. For example, a works contract involving the construction of a bridge or dam or tunnel would presumably fall within Section 65(105)(zzd) as a contract which relates to erection, commissioning or installation. It is clear that such contracts were never intended to be the subject matter of service tax. Yet, if learned counsel for the revenue is right, such contracts, not being exempt under the Finance Act, 1994, would fall within its tentacles, which was never the intention of Parliament." The ratio of the aforesaid principle was also followed in the case of Commissioner of Central Excise, Goa Versus R.K. Construction 2016 (41) S.T.R. 879 (Tri. - Mumbai). 7. We find that the Learned Commissioner in the instant case, has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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