TMI Blog2018 (11) TMI 1465X X X X Extracts X X X X X X X X Extracts X X X X ..... and in respect of composite contracts would fall under works contract service only. The demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007 - The levy of service tax prior to 1.6.2007 cannot also sustain by application of the decision of the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. Appeal allowed - decided in favor of appellant. - Appeal Nos. ST/659/2010 And ST/575/2012 - Final Order Nos. 42698-42699/2018 - Dated:- 26-10-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Ms. D. Naveena, Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) And Shri B. Balamurugan, AC (AR) for the Respondent ORDER Per Bench The issue involved in both the appeals being the same they are heard together and are disposed by this common order. 2. Brief facts of the case are that the appellants are paying service tax under the head commercial construction service. The period involved in the first appeal is from April 2007 to September 2007 and the period involved in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only. The relevant portion of the said decision is reproduced as under:- 7.8 On the contrary, being composite works contracts, they will necessarily fall within the ambit of works contract service as defined under section 65(105)(zzzza) ibid. It is possibly with this intent in mind that the lawmakers have included in the definition of works contract, erection and commissioning service, commercial or industrial construction service, construction of complex service and in addition turnkey projects including EPC projects within the definition of Works Contract Service. 7.9 At this juncture, it is worthwhile to reproduce excerpts from the Union Finance Minister s budget speech in 2007:- State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the activity more specifically and, therefore, as per the provisions of Section 65A of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date. 7.12 Thus, for example, while construction of a new residential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(105)(zzzza) Explanation (c). For both these categories for the definition of residential complex, the definition given in section 65(105)(91a) will have to be adopted as discussed above will have to be taken into account. 7.13 We find sustenance in arriving at this conclusion by a number of decisions of the Tribunal in which it has held as under:- a. In the case of Commissioner, Service Tax, New Delhi Vs. Swadeshi Construction Company 2018-TIOL-1096-CESTAT-DEL, the Tribunal in para 7 has held as under:- 7. We note that in the present case, the SCN was issued on 27.05.2011. On that date, both the tax entries, namely, Commercial or Industrial Construction Service and Works Contract Service, were available in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be vivisected for the confirmation of demand under various other services. On this ground itself, the entire demand confirmed by the adjudicating authority is liable to be set aside and we do so. c. In the case of URC Construction (P) Ltd. Vs. Commissioner of Central Excise, Salem 2017 (50) STR 147, the Tribunal in paragraphs 9, 10 and 11 has held as under:- 9. The Hon ble Supreme Court in re Larsen Toubro Ors. has decided thus 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s proposed demand of service tax liability only under these two categories and not under Works Contract service. The demand confirmed in the impugned order under these categories namely under construction service for the period 10.09.2004 to 16.06.2005 under CICS for the period 16.06.2005 to 30.09.2008 cannot also sustain and are therefore set aside. So ordered 5.3 For the period 01.04.2008 to 30.09.2008, the demand confirmed is ₹ 26,88,611/-. We note that the appellant has not contested the liability under works contract for this period. The only argument brought forth by the Ld. Counsel is that they have discharged an amount of around ₹ 82 lakhs under this category after the visit of the departmental officers and therefore an amount of ₹ 36,88,611/- demanded in the impugned order should be considered as having been discharged. We find merit in his argument and hence the demand of ₹ 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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