TMI Blog2021 (2) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... site in nature involving both supply of goods/materials and provisions of services to Gautami. Such composite contracts are taxable under the category of works contract w.e.f June 1, 2007. The period of dispute in the present appeal is from April 1, 2006 to October 31, 2007. Thus, the appellant was not required to pay service tax for any period prior to June 1, 2007. Even for the period post June 1, 2007, service tax could not be demanded under CICS, as the service was classifiable under works contract . The confirmation of demand under the impugned order cannot be sustained - Appeal allowed - decided in favor of appellant. - SERVICE TAX APPEAL NO. 51050 OF 2015 - FINAL ORDER No. 51037/2021 - Dated:- 19-1-2021 - MR. DILIP GUPTA, P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso asserts that it paid service after availing abatement of 67% in terms of the Notification dated March 1, 2006 [the Notification] by utilizing the CENVAT credit availed by the appellant on the input services procured for the provision of output services, other than services relating to CICS for Gautami. 3. Audit of the records of the appellant revealed that it had utilized CENVAT credit against payment of service tax on CICS even though benefit of abatement of 67% under the notification was admissible only when the service provider did not avail credit of input, input services or capital goods. Accordingly, a show cause notice dated March 1, 2011 was issued to the appellant. 4. The appellant had filed a reply to the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax under the category of CICS on services which were composite in nature. This position has been settled by the Supreme Court in Commissioner Vs. Larsen Toubro Limited [ 2015 (39) STR 913 (SC) ] ; (ii) Even if the appellant had paid service tax under CICS, the appellant can still contend that service tax could only have been demanded treating it to be a works contract since the contract involved both goods and services; and (iii) The show cause notice called upon the petitioner only under CICS and not work contract service. 7. Shri Arun Thaplial, learned Authorized Representative of the Department, however, supported the impugned order and submitted that the person who claims exemption as establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectrical erection and installation services and commissioning, start-up and testing of the facility, including all relevant licensing and permitting, and (iv) provision of all necessary labour, construction fuels, chemicals, utilities, tools supplies and other consumable and services (other than materials, equipments and supplies provided by Owner s suppliers) and all in accordance with this agreement . 10. The aforesaid provisions clearly demonstrates that the contract was composite in nature involving both supply of goods/materials and provisions of services to Gautami. Such composite contracts are taxable under the category of works contract w.e.f June 1, 2007. The period of dispute in the present appeal is from April 1, 2006 to Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner availed CENVAT credit in March, 2006 from the GTA services. Therefore, according to the adjudicating authority, the petitioner was not entitled to the benefit of notification dated 01.03.2006 with regard to the abated value on the ground that the petitioner availed the CENVAT credit. In such circumstances, both the Commissioner (Appeals) as well as the Tribunal were justified in holding that the petitioner was not liable to the benefit of the notification dated 01.03.2006. It was submitted that, the petitioner could not have raised a contention of not liable to pay service tax, despite the fact that the petitioner had voluntarily registered under the category of 'commercial / industrial construction services' under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement which is to be derived from the gross amount charged for the works contract less the value of the property in goods transferred in the execution of the works contract. In such circumstances, the Apex Court held that when the legislature has introduced the concept of service tax on indivisible works contracts then such contracts were never intended to the subject matter of the service tax, and therefore, such contracts, not being exempt under the Finance Act, 1994, cannot be said to fall within its tentacles, as which was never the intention of Parliament. The Apex Court, therefore, held that the levy of service tax on works contract was non-existent prior to 01.06.2007. 7. We are therefore of the opinion that the impugned order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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