TMI Blog2018 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, such contracts are to be considered as works contracts defined under Section 65 (105) (zzzza) - reliance placed in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT], where it was held that such composite contracts cannot be charged to service tax under any other category prior to the introduction of WCS. - the demand for service tax for the period prior to 01/06/2007 set aside. Payment of service tax w.e.f. 01/06/2007 under the category of WCS - Composition Scheme - denial on the ground that the assessees have failed to satisfy to Rule 3 (3) of the relevant Composition Rules which require the assessees to exercise the option for payment of service tax unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities in the form of turnkey contracts for Rajasthan Government in connection with provision of traffic signals in different parts of the States. The work included management, maintenance and repair of traffic signals poles/lights and installation/commissioning of surveillance cameras at various road inter-sections. The assessees contracts included supply of materials. The Department, after issue of show cause notices raised the demand of service tax for the period October 2005 to September 2010. The Original Authority ordered payment of service tax against the all the three assessees for the full period without allowing the benefit of abatement towards providing the materials used in carrying out the contracted activities. The three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upto 31/05/2007 under any other category ; (ii) He submitted that the activity carried out was considered as works contract by the VAT Department also he also submitted that the details of the material which was consumed while providing the service was furnished to the lower authorities which was supported by Chartered Accountant certificate as well as Civil Engineering Certificate ; (iii) He further submitted that the service tax demanded against the assessees was also paid alongwith interest prior to the issue of show cause notice. He submitted that a substantial part of the service tax demand was paid prior to the issue of show cause notice. In any case balance dues have also been paid by the assessees alongwith interest thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of show cause notice. 7. We have heard both sides at length and perused the record. 8. From the nature of activity carried out by the assessees for the Rajasthan Government, it is seen that contracts were in the form of turnkey contracts which involved supply of the materials necessary for carrying out the work of installation and maintenance of surveillance cameras, street lights etc. Consequently, such contracts are to be considered as works contracts defined under Section 65 (105) (zzzza). The decision of Hon ble Supreme Court in the case of Larsen Toubro Ltd. (supra) is very much applicable to such contracts. The Apex court has categorically held that such composite works contract are liable to payment of service tax only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to becomplied mandatorily. But in the present case, the requirement of exercising of an option is procedural and has been complied with delay. Hence, we find that the same cannot come in the way of extending the benefit. Hence, we reject this ground of appeal by the Revenue. 10. The assessees have also appealed that penalties involved may be set aside under Section 80. We note that the levy of service tax under the category of works contract service was the subject matter of substantial litigation which got settled only with the decision of Hon ble Supreme Court in the case of Larsen Toubro Ltd. (supra). In view of this fact, we are of the view that the appellants, who have discharged the service tax liability in full even though p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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