TMI Blog2019 (1) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... 05)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter - the issue being identical, the above ruling squarely applies to the case on hand - demand set aside. Works Contract Services - Demand of ₹ 29,58,712/- (06/2007 to 02/2008) under WCS with interest thereon - Held that:- It is a fact borne out of the records that the assessee had charged service tax in their bills raised on customers, the service tax liability against which is ₹ 29,58,712/-, payable for the work undertaken between June 2007 and November 2008. Out of the above service tax liability, assessee has discharged a sum of ₹ 25,00,000/- on 11.02.2009. It is clear from the appeal memo that the assessee-appellant has not disputed the findings of the Ld. Commissioner that there was no dispute as to classification - there are no reason to interfere with the above findings of the Ld. Commissioner and hence, the same is held to be in order. Imposition of penalty - Held that:- The Delhi Bench of the Tribunal in the case of Siddha Projects Pvt. Ltd. [2017 (4) TMI 36 - CESTAT NEW DELHI] has set aside the penalty imposed under Sections 76 and 78 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee/appellant and Ld. ADC (AR) Shri. K. Veerabhadra Reddy appeared on behalf of the Revenue. 3.1 During the course of hearing, Ld. Advocate for the appellant submitted the following table with regard to the demands confirmed in the impugned Order-in-Original : Sl. No Annexure to SCN Details of Demand Service Tax Payable (in Rs.) Service Tax paid before investigation (in Rs.) Balance Service Tax demanded (in Rs.) 1 A I Demand under CICS, after allowing 67% abatement (Nov 2006 to 10/2007) 30,97,659/- 11,10,875/- + 1,58,973/- 62,67,700/- 2 A II Demand under CICS, without granting abatement (01/2007 to 12/2007) 14,81,177/- 3 A III Demand under WCS (06/2007 to 02/2008) 29,58,712/- Total 75,37,548/- 12,69,848/- 62,67,700/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the decisions referred to during the course of arguments. 6.1 In the light of the recent decision of this Bench of the CESTAT in the case of M/s/ Real Value Promoters Pvt. Ltd.(supra), we note that this Bench after considering the decisions of various fora including the decision of the Hon ble Supreme Court, has ruled as under : 7.7 In the present appeal also, there is no dispute that the construction activities are in the nature of composite works contract. The appellants being involved in the construction of the same projects prior to and after 1.6.2007, for example, even in the show cause notice dated 20.10.2009 (relating to Appeal No. ST/723/2010), taxable value has been calculated at 33% of gross amount received which is an implicit admission that that activity involved both material supply as well as value services. Another ground for demand is that the appellants have not exercised their option for payment of service tax under Works Contract (Composition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad 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 contention by stating that works contract service is service / activity which would be of a general nature whereas the construction activities defined in Commercial or Industrial Construction Services, Construction of Complex Service and Construction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Section 65(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 the services rendered by the appellant in respect of 52 contracts entered with various Govt. authorities need to be taxed under MMRC/CICS/ECIS or otherwise. It is on record and undisputed that the adjudicating authority has specifically held 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 el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than commercial or industrial construction service . It is already established in the 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under Commercial or Industrial Construction Service or Construction of Complex Service, cannot therefore sustain. In respect of any contract which is a composite contract, service tax cannot be demanded under CICS / CCS for the periods also after 1.6.2007 for the periods in dispute in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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