TMI Blog2023 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid on Work Contract service - the issue has already settled by 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] - In this judgment, the Hon ble Supreme Court has categorically held that Work Contract Services involving both supply of goods and service , were liable to service tax only w.e.f.01.06.2007. Prior to 01.06.2207, such services cannot be charged to service tax under any other category of taxable service, namely Commercial or Industrial Construction Service. As the demand involved in the impugned order pertains to the period prior to 01.07.2016, the demand of service tax confirmed under the category of Commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them were involving both supply of goods and services and hence such services are classifiable as Work Contract service which was not liable to service tax during the period involved in the impugned order. The Appellant submitted that they have paid VAT on the above said work contract service. Work Contract Service was liable to service tax only w.e.f. 01.06.2007. Prior to this date no service tax was liable to be paid on Work Contract service. 4. The Appellant stated that the issue has already settled by the Hon ble Supreme Court in the case of Commissioner of Central Excise, Kerala Vs Larsen Toubro Ltd., 2015 (39) STR 913 (SC). Accordingly, they contended that the demands made in the impugned order are not sustainable. 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the reason that in our Constitutional scheme, taxation powers of the Centre and the States are mutually exclusive. There is no concurrent power of taxation. This being the case, the moment the levy contained in a taxing statute transgresses into a prohibited exclusive field, it is liable to be struck down. In the present case, the dichotomy is between sales tax leviable by the States and service tax leviable by the Centre. When it comes to composite indivisible works contracts, such contracts can be taxed by Parliament as well as State legislatures. Parliament can only tax the service element contained in these contracts, and the States can only tax the transfer of property in goods element contained in these contracts. Thus, it becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimately to be goods, in the cost of the service. As was held by us in Gujarat Ambuja Cements Ltd. v. Union of India [(2005) 4 SCC 214], SCC at p. 228, para 23 :- This mutual exclusivity which has been reflected in Article 246(1) means that taxing entries must be construed so as to maintain exclusivity. Although generally speaking, a liberal interpretation must be given to taxing entries, this would not bring within its purview a tax on subject-matter which a fair reading of the entry does not cover. If in substance, the statute is not referable to a field given to the State, the court will not by any principle of interpretation allow a statute not covered by it to intrude upon this field. (at paras 88 and 89) 9. In the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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