TMI Blog2023 (10) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... at For the period after 1.6.2007, service tax liability under category of commercial or industrial construction service‟ under Section 65(105)(zzzh) ibid, Construction of Complex Service‟ under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter - thus, the demand of differential service tax under commercial or industrial construction service denying abatement cannot sustain and requires to be set aside Disallowance of credit on various input services in the nature of insurance services - HELD THAT:- The period involved is prior to 1.4.2011 when the definition of input service had wide ambit as it included the words activities relating to business . The decisions of various forums have held that the said services would be eligible for credit. We hold that the appellant has established that the services were availed for providing output services and therefore is eligible for credit. The denial of credit is without basis and cannot be justified. Penalty - HELD THAT:- The appellant has paid up the non-contested/admitted tax liability. For this reason, we hold that penalties imposed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit of duty paid on inputs or for the capital goods or cenvat credit of service tax paid on input services. It appeared that the appellant is not eligible for the abatement as they have availed credit on input services. Thus, the appellant was liable to pay differential service tax of Rs.26,08,254/- on commercial or industrial construction services for the period from December 2008 to March 2010. 3. Subsequent to the initiation of investigation, the appellant paid service tax of Rs.46,16,492/- in cash and Rs.6,55,920/- through cenvat credit along with interest of Rs.2,47,117/- towards their service tax and interest liabilities. 4. Another violation noticed by the department was that the appellant had availed input service credit tax paid on insurance premium incurred for their employees. According to the department, the said service was in the nature of personal benefit extended to the employees and therefore are not used for providing any output services. The credit availed on such output services is not available as per Rule 2(l) of CCR 2004 and the appellant has wrongly availed the credit on such services to the tune of Rs.12,24,474/- for the period April 2006 to March 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput services, the abatement of 67% on the taxable value is not applicable. It is submitted by the counsel that the appellant had already reversed the credit which would be equal to non-availment of credit. For this reason, the abatement ought not to have been denied. Alternatively, the learned counsel submitted that the demand raised under commercial or industrial construction services cannot sustain for the reason that the contracts are of composite nature which involves both supply of materials and rendering of services. The Hon ble Apex Court in the case of CCE Customs, Kerala Vs Larsen and Toubro Ltd. 2015 (39) STR 913 (SC) has held that the demand of service tax on composite contracts (which involves both supply of materials as well as services) cannot sustain prior to 01.06.2007 when Works Contract Services were introduced in the Finance Act, 1994. 8. Further, in the case of Real Value Promoters Pvt. Ltd. Others Vs CGST CE, Chennai - Final Order No.42436-42438/2018 dt. 18.09.2018 the CESTAT held that demand under various services in the nature of construction of residential complex services, commercial or industrial construction services cannot sustain in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.34,14,375/-), Commercial or Industrial Construction Service (Rs.10,19,793/-), Works Contract Service (Rs.2,90,915/-). For the period upto August 2008 the appellant is liable to pay Rs.47,25,083/-. The impugned order records that the appellant has paid up the amount along with interest and is not contesting the same. Annexure-II to the show cause notice issued shows that for the period December 2008 to March 2009 (2009-10), the appellant is liable to pay service tax of Rs.26,08,254/- under Commercial or Industrial Construction Services. In para 3.0 and 3.1 of the SCN it is categorically stated that the appellant has wrongly availed abatement of 67% as per Notification No.1/2006-ST dt. 1.3.2006 and therefore is liable to pay differential tax of Rs.26,08,254/- for the period December 2008 to March 2010 under commercial or industrial construction services. 14. The Ld. Counsel for the appellant submitted that the demand under the said category cannot sustain for the reason that the nature of contracts are composite in nature. The dispute with regard to denial of benefit of abatement itself establishes that the contracts are composite in nature which involves both element of supply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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