TMI Blog2018 (11) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices 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 demand of service tax under ECIS cannot sustain after the period 1.6.2007. CENVAT Credit - rent-a-cab prior to 1.4.2011 - Held that:- The denial of CENVAT credit on rent-a-cab service being prior to 1.4.2011 is unjustified and the assessees are eligible to avail CENVAT credit on the same. Appeal allowed - decided in favor of appellant. - ST/397/2011, ST/41867/2013 to ST/41870/2013 and ST/CO/42245 to 42248/2014, ST/42124/2013 to ST/42127/2013 and ST/Misc./4110, 41152 – 41155, 40809/2017 - Final Order Nos. 42770-42778/2018 - Dated:- 29-10-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri J. Shankar Raman, Advocate for Assessee Shri A. Cletus, Addl. Commissioner (AR) for Revenue ORDER Per Bench The issue involved in all these appeals being the same, they were heard together and are disposed by this common order. The parties herein are referred to as assessee and department for the sake of convenience. 2. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 2008 and the demand made in the show cause notice is under erection, commissioning and installation services. As per the decision of the Tribunal in the case of Real Value Promoters Ltd. Vs. CCE 2018-TIOL-2867-CESTAT, Chennai, the demand under erection, commissioning and installation service for composite contracts will not sustain. In the said show cause notice, there is an allegation of irregularly availed CENVAT credit on rent-a-cab service also. He submitted that the period is prior to 1.4.2011 and the said services are eligible for credit. In the other show cause notices, the demand is made under ECIS and the original authority confirmed the demand against which an appeal was filed before Commissioner (Appeals), who though upheld the confirmation of demand, classified the services to be under works contract service and remanded the matter for requantification to the adjudicating authority. Against this order, wherein the Commissioner (Appeals) has confirmed the demand under works contract service, the department has filed appeal raising the ground that the confirmation of demand ought to have been under ECIS and not under works contract service. He relied upon the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract service tax. Hence, I propose to an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the words contract . 7.10 The issue was analyzed by the Hon ble Apex Court in Larsen Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65(105)(zzzza) i.e. Works Contract Services. As pointed out by the ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax under CICS / CCS / RCS prior to 1.6.2007 and after. Our view is supported by the fact that the method / scheme for discharging service tax on the service portion of composite contract was introduced only in 2007. 7.11 The ld. AR Shri A. Cletus has tried to counter this cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first para itself. However, the proposal for tax demand was specifically made under Commercial or Industrial Construction Service under Section 65 (105) (zzq) of the Finance Act, 1994. In such situation, we note that it cannot be a case of simple mentioning of wrong provisions of law as submitted by the Revenue. Apparently, the tax liability of composite works contract is to be considered under works contract services only as per legal position settled by the Hon'ble Apex Court in M/s L T Limited. Even in the appeal, the Revenue submitted that the respondent were engaged in construction services liable to tax under tax entry Section65(105) (xxq). The grievance of the Revenue is with reference to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity. b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai 2018-TIOL-360-CESTAT-MUM, in respect of identical issue for the period from 2005 to 2012, the Tribunal in para 7 has held as under:- 7. On careful consideration of the submissions made by both the sides, we find that the issue falls for consideration is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of properly in goods transferred in the execution of a works contract. 10. In view of this specific decision and the admitted claim of the appellant that they are not providers of commercial or industrial construction service but of works contract service , no tax is liable on construction contracts executed prior to 1st June, 2007. 11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviability of tax for rendering works contract service . On the contrary, the submission of the appellant that they had been providing works contract service had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service in the light of the Hon ble Supreme Court judgment in Larsen Toubro (supra) upto 1.6.2007 b. For the period after 1.6.2007, service tax liability under category of commercial or industrial construction service under Section 65(105)(zzzh) ibid, Construction of Complex Service under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services simpliciter. c. For activities of construction of new building or civil structure or new residential complex etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under Works Contract Service as defined under section 65(105)(zzzza) ibid. d. The show cause notices in all these cases prior to 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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