TMI Blog2018 (12) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are in the nature of services‟ simpliciter. Appeal allowed - decided in favor of appellant. - Application Nos.: ST/Misc[CT]/41688 & 41689/2017, Appeal Nos.: ST/00460 & 00461/2012 - Final Order No. 43040-43041/2018 - Dated:- 3-12-2018 - Shri Madhu Mohan Damodhar, Member (Technical) And Shri P. Dinesha, Member (Judicial) Shri. P. C. Anand, Consultant for the Appellant Shri. A. Cletus, ADC (AR) for the Respondent ORDER Per P. Dinesha: These appeals have been filed by the assessee against the Orders-in-Original No. 49 50/2012 dated 26.03.2012 passed by the Commissioner, Service Tax Commissionerate Chennai. 2. Briefly stated, the appellant undertook construction at its own site as a builder and promoter, to build 246 residential flats. Subsequently, the appellant entered into agreement with various buyers of the said flats. The appellant assuming that its activity of providing Construction of Residential Complex Service was not liable to service tax, was not paying service tax. It is their case that they had completed some of the construction activities as on 01.07.2010 with some of the buyers not paying service tax even though complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposition Scheme for Payment of Service Tax) Rules, 2007. In any case, the show cause notices implicitly agree that the work performed by the appellant is in the nature of composite works contract only. Based on the Hon ble Apex Court judgment in Larsen Toubro, such composite works contract then will not be liable to service tax levy prior to 1.6.2007. On the same ratio, such composite contracts even for the period after 1.6.2007 disputed in these appeals will still have to be held as composite works contract only and not pure service simpliciter contracts that could be classified under commercial or industrial construction service, or construction of complex service. To put in another way, to merit being classified as CICS or CCS, the service provider concerned will be rendering only service simpliciter without any other element in them namely without any material or goods supply involved. That is definitely not the case in the facts of these appeals. The activities of the appellants will therefore continue to be in the nature of composite works contract services and hence even after 1.6.2007 for the periods disputed in these appeals they cannot be brought within the fold of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Residential Complex etc. are of special nature. He took support of the maxim generalia specialibus non derogant - general things do not derogate special things . The counsel for appellants have submitted that as per Section 65A of the Act ibid, classification of service shall be based on the specific entries and the more specific description of service has to be preferred. He invited our attention to CBEC s Circular 128/10/2010 dated 24.8.2010 which is reproduced as under:- The matter has been examined. As regards the classification, with effect from 1-6-2007 when the new service Works Contract service was made effective, classification of aforesaid services would undergo a change in case of long term contracts even though part of the service was classified under the respective taxable service prior to 1-6-2007. This is because works contract describes the nature of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that all the 52 contracts which has been executed by the appellants are with material. Learned Counsel was correct in brining to our notice that the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact that the contracts were executed with material. It is also on record that the Revenue has not contested these findings of the adjudicating authority before the Tribunal. If that be so, even when the Revenue authorities are accepting the facts that the contracts executed by the appellant are nothing but works contracts, for the period in question, entire case of the Revenue in the show-cause notice stands demolished by the Apex Court in the case of Larsen Toubro Ltd. (supra). In the said judgment, their Lordships have very categorically laid down the law that the works contract 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid judgment of the Hon ble Supreme Court that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the contract. d. In the case of Logos Construction Pvt. Ltd. Vs. Commissioner of Central Excise as reported in 2018 (6) TMI 1361 , the Tribunal has held as under:- 5.1 The payment upto 01.06.2007 will get extinguished on account of the law that has been laid down by the Apex Court in the case of Larsen Toubro Ltd., (supra), relied upon by the Ld. Counsel. So ordered. 5.2 The Ld. Counsel has been at pains to point out that on-going projects which were only in the nature of works contract prior to 01.04.2007 cannot be brought under different category of Construction Services and CICS subsequently. We find merit in his arguments. The SCN has 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 30.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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