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2019 (6) TMI 628

y the impugned order-in-original, are contracts of composite nature where the transfer of property as well as service components are involved. It has already been held by Hon’ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] held that any contract which involves transfer of the property as well as service component same has to be classified as the work contract service and same will not be entitled for the classification as the service simplicitor - Considering the views of the Apex Court and of the fact that a new service under the category of work contract service was got enacted by the Finance Act since 1 June 2007, it is held t .....

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aken the required registration from the Service Tax Department for payment of the service tax under the category of commercial or industrial construction service as well as construction of complex service. Investigations were started by the Department against the appellant wherein it was found that the appellant have changed the classification from commercial or industrial construction service to work contract service since 1 June 2007. The basic allegation on the basis of which the demand of service tax has been raised in the show cause notice dated 19 May 2009 is that the appellant have wrongly paid service tax at the composition scheme under the work contract service for the work orders which were under progress before 1 June 2007. It ha .....

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position scheme. Holding such views, the service tax demand has been confirmed under Section 73 (1) of Finance Act, 1994, penalties under Section 76, 77 and 78 of the Finance Act, has also been imposed on the appellant. 2. It has been contended by the learned Advocate appearing on behalf of the appellant that since all the contracts executed by the appellant were composite contracts where the service component as well as the transfer of the property of the goods was involved in execution of the projects at hand and since the work contract service has been enacted for the levy of the service tax only since 1 June 2007 and, therefore, the comprehensive contract involving supply of material and service component will be classifiable as work co .....

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er-in-original. 4. Having heard both the sides, we notice that the contracts on which the service tax has been demanded by the impugned order-in-original, are contracts of composite nature where the transfer of property as well as service components are involved. It has already been held by Hon ble Apex Court in the case of Commissioner of Central Excise & Customs, Kerala versus Larsen & Toubro reported in 2015 (39) S.T.R. 913 (S.C.) that any contract which involves transfer of the property as well as service component same has to be classified as the work contract service and same will not be entitled for the classification as the service simplicitor. Considering the views of the Apex Court and of the fact that a new service under .....

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cision in the case of Commissioner of Central Excise & Customs, Kerala versus Larsen & Toubro reported in 2015 (39) S.T.R. 913 (S.C.), we hold that the composite contracts involving transfer of the property and service component are not taxable before 1 June 2007 under the simplicitor service namely commercial or industrial construction service or construction of complex service. We also hold that after 1 June 2007, the appellant are entitled to classify the service under the work contract service and are entitled to avail the composition scheme under work contract service for payment of service tax at the reduced rates. 5. In view of the above, we remand back the matter to the Adjudicating Authority to re-adjudicate the matter on f .....

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