2017 (4) TMI 38

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..... s of the applicable provisions, it is clear their entitlement cannot be denied. The denial of composition scheme by the Original Authority is mainly on the ground that the appellant cannot exercise option under the scheme as the contracts were taxable under ‘commercial or industrial construction service’/’construction of complex service’ prior to 01/06/2007 and accordingly after 01/06/2007 they cannot opt for payment of service tax under works contract service under composition scheme - The reason for denial of the benefit recorded in the impugned order is not sustainable - also the imposition of penalties on the appellant is not justified. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 56534 of 2013 - Fin .....

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..... ment of Service Tax) Rules, 2007 in respect of ongoing contracts at the time of introduction of new tax entry works contract service w.e.f. 01/06/2007. The Adjudicating Authority held that they should discharge duty on the full rate on gross value and they are not eligible to avail the composition scheme in respect of works contract which were entered into prior to 01/06/2007. It was held that the appellant cannot exercise option for composition scheme in respect of ongoing works contract. The learned Counsel submitted that, admittedly, all the contracts executed by the appellants are composite in nature involving both supply of materials as well as provision of service. This fact is not disputed. As such, the appellant s service tax li .....

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..... te that the activities carried out by the appellants are taxable only w.e.f. 01/06/2007. In such situation, it is clear that their payment of tax in terms of composition scheme should be examined for correctness based on the said provisions only. It is seen that there is no format or prescribed specific procedure for exercising separate option under the scheme. After the introduction of new tax entry when the appellants discharged service tax in terms of the applicable provisions, it is clear their entitlement cannot be denied. We note that in terms of calculation in Annexure B to the show cause notice, the differential service tax is only relatable to denial of the said composition scheme to the appellant. We find that the denial of compos .....

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