TMI Blog2019 (4) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... tegory of Works Contract Service with effect from 01/06/2007 and further that such contracts cannot be charged to Service Tax under any other category prior to 01/06/2007. The work orders are required to be scrutinized denovo to decide the liability of Service Tax, if any. The Adjudicating Authority did not have the benefit of the decision of the Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] - Under the circumstances, the impugned orders merit to be set aside and the issue remanded to the Adjudicating Authority for Denovo decision on the Service Tax liabilities of both the appellants involved. Appeal allowed by way of remand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demanded Service Tax on the above activities under the category of Commercial or Industrial Construction Service , and confirmed the demand of ₹ 1,17,37,138.00/- against M/s. National Projects Construction Corporation Ltd.; and imposed equivalent penalty under Section 78 of the Finance Act, 1994 and also imposed a penalty equal to ₹ 200.00/- per day under Section 76 of the Act and another penalty of ₹ 1,000.00/- under Section 77 ibid on them. (ii) M/s. NPPC had sub-contracted the work to M/s. Samal Builders Private Limited (SBPL). Against SBPL for the same work, the Commissioner confirmed a demand of Service tax of ₹ 1,12,56,495.00/- and imposed equivalent penalty under Section 78 of the Act and also im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other category, prior to 01/06/2007. (iii) The Ld. Senior Advocate further submitted that the Adjudicating Authority has declined to entertain their argument that the work orders are in the nature of works contracts and has proceeded to order payment of Service Tax under the category of Commercial or Industrial Construction Service . (iv) He also submitted that most of the works involved in the three work orders were completed prior to 01/06/2007 and as such Service Tax liability, if any will be only for the works carried out after 01/06/2007. (v) Even under the category of Works Contract Service , the Ld. Senior Advocate submitted that the works involved were in the nature of construction of ash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by NTPC on NPCC. He also submitted that in this regard CBEC had issued two circulars. CBEC circular No. 96/7/2007-ST dt. 23/08/2007 had superseded another circular F. No. B/43/5/97-TRU dt. 02/07/1997 which was to the effect that sub contractors are not liable for payment of Service Tax as long as the principal contractor discharges such liability covering the entire value of work carried out by the sub-contractor. In this connection, he also relied on following decisions:- i) 2018 (10) GSTL 372 (T-Del.)-Ballset Entertainment P. Ltd. Vs. C.S.T, Delhi; ii) 2015 (40) STR 220 (All.)-Indfos Industries Ltd. Vs. C.C. CEX., Delhi; iii) 2009 (13) STR 636 (T-Ahmd.)-Koch-Glitsch India Ltd. Vs. C.C.E, Vadoda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments advanced on behalf of both the appellants is that these work orders are in the nature of Works Contracts . The lower Authority has considered such contracts to be one for providing Commercial or Industrial Construction Service. A separate service under the category of Works Contract Service was introduced in with effect from 01/06/2007. Both sides agree that the law on the point regarding leviability of the Service Tax on indivisible Works Contracts has been settled by the Hon ble Supreme Court in the case of Larsen and Toubro (Supra). The Apex court held that such contracts are liable for Service Tax only under the category of Works Contract Service with effect from 01/06/2007 and further that such contracts cannot be charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on behalf of the SBPL that no liability of Service Tax at all will arise on them in as much as they have acted only as subcontractors to NPCC. A perusal of the contracts awarded by NPCC to SBPL reveal the above fact. It is evident that the entire value of the contracts awarded to SBPL is subsumed in the value of the contracts received by NPCC from NTPC. The CBEC had issued clarification to the effect that subcontractor will not be liable to payment of Service Tax as long as the entire value of work awarded to the sub-contractor is included by the principal contractor for payment of Service Tax. Such CBEC Circular F. No. B/43/5/97-TRU dated 02/07/1997 has been withdrawn only by issue of Circular No. 96/07/2007-ST dated 23/08/2007. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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