TMI Blog2020 (2) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount equivalent to the same percentage of the gross amount charged for the works contract till the completion of the said contract, even if the percentage is revised subsequently? The file may, therefore, be placed before the Hon'ble the President for constituting a Larger Bench. - SERVICE TAX APPEAL No. 52447 OF 2015-DB - MISC. ORDER No.50586/2019 - Dated:- 2-8-2019 - MR. DILIP GUPTA, PRESIDENT AND MR. BIJAY KUMAR, MEMBER (TECHNICAL) Shri P.K. Sahu, Advocate for the Appellant Shri Sanjay Jain, Authorized Representative of the Respondent ORDER This appeal is directed against the order dated 30 March, 2015 passed by the Commissioner, Service Tax, Delhi, by which the demand of Service Tax has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contract. The Appellant was, therefore, called upon to pay Service Tax @ 4.8% after 01 April, 2012. 5. The Appellant filed a detailed reply to the show cause notice specifically asserting that in view of the provisions of the Composition Scheme, the rate of tax applicable at the time the option was exercised would continue for the entire period of contract and, therefore, any revision in the rate of tax would not be applicable. This submission of the appellant did not find favour of the adjudicating authority. 6. An important issue that arises for consideration in this appeal is whether any revision in the amount of Service Tax to be paid under the Composition Scheme would be applicable for those contracts where the option for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the revised rate after enhancement is not applicable to continuing works contract in the absence of machinery for such split-up value for applying the said enhanced rate. We are not in agreement with such proposition. Though the option for composition exercise for a particular contract is for the whole contract, the Revenue cannot be denied increased rate of duty applicable to the said contract. The case laws relied upon by the appellant and the submissions made regarding a promissory estoppels are not relevant to the facts of the present case. While composition scheme is to be applied for the whole contract, there is no legal bar for the Revenue to collect the enhanced rate of composition when the Government has amended the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax in respect of the said works contract and the option so exercised shall be applicable for the entire works contract and shall not be withdrawn until the completion of the said works contract. 9. With effect 01 March, 2008, two per cent in the aforesaid Scheme was substituted by four per cent and was subsequently substituted by 4.8 per cent with effect from 01 April, 2012. 10. Learned Counsel for the Appellant submitted that an option was given to a person to either pay Service Tax at the rate specified in Section 66 of the Finance Act, 1994 [the Act] or to discharge Service Tax liability on the works contract services provided or to be provided by paying an amount equivalent to 2% or 4% or 4.8%, as the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised and is, therefore, repugnant and/or contrary to the composite scheme offending under Section 94 of the Finance Act, 1994. Secondly, the purported notification, in effect, have rendered the composite scheme unreasonable and unworkable offending Articles 14, 19(i)(g) and 265 of the Constitution of India. Thirdly, enhancing the rate by a subsequent notification after the parties are allowed to alter the position is hit by principle of promissory estoppel and fourthly, the show cause notice was palpably barred by limitation and no ground exists for invocation of the extended period. 11. The first issue raised, namely, whether the Notifications dated 01 March, 2008 and 17 March, 2012 can be given a retrospective effect after an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition Scheme cannot operate retrospectively. 13. The learned Authorized Representative of the Department has, however, submitted that the decision of the Tribunal in Airef Engineers Pvt. Ltd. lays down the correct position of law and in support of his submission has placed reliance upon the provisions of the Points of Taxation Rules, 2011. He, therefore, contended that the Appellant was required to pay Service Tax @ 4.8% from 01 April, 2012. 14. In our considered opinion, it would be appropriate to refer the following issue to a Larger Bench : Whether in view of the provisions of Rule 3 of the Composition Scheme, a person who is liable to pay Service Tax in relation to a Works Contract Service opts to discharge his Service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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