TMI Blog2018 (6) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... e the supply contract, erection contract as well as civil works contract are required to be assessed independently since the same have been executed separately by the two parties. Considering the civil works contract, the adjudicating authority has blindly gone by the classification declared in the ST-3 returns under 65 (105) (zzd). The execution of civil works no doubt involves supply of materials in the form of steel, cement etc. Consequently, such contracts merit classification under 65 (105) (zzq) under commercial or industrial construction service which also enjoys abatement in terms of Sl.No. 7 of the Notification No. 1/2006-ST. Benefit of concessional rate of duty under Works Contract (Composition Scheme) - Held that:- Since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in connection with the allegation that they were not paying service tax, but were claiming ineligible abatement under Notification No. 1/2006-ST dated 01.03.2006. After conclusion of investigation SCN dated 20.10.2009 was issued to the appellant. After completion of the process of adjudication, the impugned order was passed confirming the demand of service tax amounting to ₹ 4,69,31,742/- along with interest. Penalties were also levied under Section 76 of the Finance Act, 1994. Challenging the above impugned order, the present appeal has been filed. 2. In this connection we have heard the Ld. Counsel, Shri Joseph Prabhakar for the appellant and the Ld. DR, Shri A.Cletus, ADC, for the Revenue. 3. The brief facts of the case ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of a few contracts, the appellant has paid the service tax under the category of works contract service, by availing the concessional rate of duty which is available under the Works Contract (Composition Scheme), the same is also denied by the Revenue. The benefit has been denied since the appellant has failed to exercise the option in respect of works contract prior to payment of service tax in respect of the said work contracts. 4. The arguments of the Ld. Counsel for the appellant are summarized as under:- i) The entire work awarded to the appellant was spilt into three different contracts by the awarder of the contract. There is no dispute with reference to the supply contract (on which VAT paid) and erection and commissionin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y portion, erection portion and civil works portion, entire contract is a turnkey project/composite contract involving design, engineering, supply, erection, commissioning and installation for sub-station. He argued that the benefit of Notification No. 1/2006 (sl. No. 5) for erection and commissioning cannot be extended to the appellant since they have not included the value of plant and machinery supplied in the value of contract for payment of service tax and hence he justified denial of abatement. c. In respect of works contract services, he drew our attention to the works contract composition scheme for payment of service tax and argued that the benefit under the scheme has the condition precedent that the provider of taxable service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he two parties. 7.2 Considering the civil works contract, the adjudicating authority has blindly gone by the classification declared in the ST-3 returns under 65 (105) (zzd). The execution of civil works no doubt involves supply of materials in the form of steel, cement etc. Consequently, such contracts merit classification under 65 (105) (zzq) under commercial or industrial construction service which also enjoys abatement in terms of Sl.No. 7 of the Notification No. 1/2006-ST. We are of the view that the appellant will be entitled to the benefit of abatement under Sl.No. 7 of the Notification ibid. The adjudicating authority was in error by blindly sticking on the classification under 65 (105) (zzd) as declared by the appellant in their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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