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M/s. Skyline Engineering Contract (India) Pvt. Ltd. Versus CST, New Delhi

2018 (2) TMI 844 - CESTAT NEW DELHI

Classification of taxable service - works contract service - effective date of tax liability - Held that: - the services rendered by the appellant, are of composite in nature involving transfer of goods as well as provision of service. As such, the tax liability on such contracts will arise only w.e.f. 1.6.2007 - the works contract service shall be liable to tax only w.e.f. 1.6.2007. - Whether or not the appellant discharged service tax correctly by availing the composition scheme as per 200 .....

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.09.2010 - interest - Held that: - Considering the question of interpretation and judicial pronouncements, which came much after the impugned order, we are inclined to set aside the penalties imposed on the appellant - Interest wherever applicable on delayed payment of service tax is statutorily requirement and has to be complied by the appellant. - Appeal allowed in part. - Service Tax Appeals Nos. 2566-2568/2012 (DB) - Dated:- 12-2-2018 - Hon ble Shri Justice (Dr.) Satish Chandra, Presiden .....

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y verifying the books of accounts of the appellant. On completion of verification, proceedings were initiated against the appellant to demand and recover service tax from the appellant. Three such show cause notices have been issued covering the period 1.10.2004 to 30.09.2010. All the notices were decided by the common impugned order dated 23.05.2012. The Original Authority confirmed service tax liability of ₹ 8,49,40,642/-. Service tax already paid was appropriated. He imposed penalties u .....

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llants have entered into a construction contract with M/s.Swami Build Tech. Pvt. Ltd. for construction of TDI Mall at Agra. The said contract is composite in nature involving supply of goods as well as provisions of service. Such contract can be levied to service tax only on the category of works contract service introduced we.f. 1.6.2007. Relying on the decision of the Hon ble Supreme Court in the case of Larsen & Toubron Ltd. - 2015 (39) STR 913 (SC), ld. Consultant submitted that there ca .....

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e they have been discharging service tax under Composition Scheme. 3. Regarding denial of cenvat credit of ₹ 8.66 lakhs for the period 1.4.2007 to 31.05.2007, it is submitted that the demand is not sustainable as the contract is liable to be taxed under Works Contract Service only w.e.f. 1.6.2007. Contesting the demand of ₹ 27.06 lakhs, for the period 1.4.2006 to 31.03.2008, it is submitted that no service tax is payable on the materials supplied. From 1.6.2007, correct tax has been .....

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ability. However, the appellant is contesting the imposition of interest and penalties as the same are not attracted in the present case. 5. Ld. Consultant submitted that the appellants have paid ₹ 97,71,964/- under Works Contract Composition Scheme during the period 1.6.2007 to 30.09.2009. This amount has not been considered while deciding the dispute by the Original Authority. Evidence of challans in such payments were also submitted. 6. Ld.AR submitted that the contract under considerat .....

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ue of materials supplied by the recipient of service. 7. We have considered the submission of both the sides and perused the appeal records. 8. We note that the allegations made against the appellant were several and varying for different periods under reference. The short payment of service tax has been worked out based on the ST-3 Returns and also referring to notifications applicable to the relevant period. The Original Authority inferred that reference to construction services should mean co .....

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esent proceedings, are of composite in nature involving transfer of goods as well as provision of service. The same is not in dispute. As such, the tax liability on such contracts will arise only w.e.f. 1.6.2007 as per the ratio laid down by the Hon ble Supreme Court in Larsen & Toubro Ltd.(supra). The Apex Court held that there is no machinery provision to collect tax on such composite services prior to 1.6.2007. Accordingly, it was held that the works contract service shall be liable to ta .....

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. Ltd. - 2015 (38)STR 1185 (Tribunal-Mumbai) held that the fact of service tax payment as reflected in the ST-3 returns filed after 1.6.2007 is sufficient enough to fulfil the conditions under Rule 3 of Works Contract Composition Scheme Rules, 2007. The Tribunal also noted that in absence of any specific form or procedure for option and the authority to whom such option has to be exercised, paying service tax at the composite rates in the return filed by the assessee is enough indication to show .....

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