TMI Blog2024 (1) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax under CICS/CCS/RCS prior to 1.6.2007 and after. The impugned orders are not sustainable in law and thereafter, the same is set aside - appeal allowed. - MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Present for the Appellant: Shri Naveen Bindal, Advocate Present for the Respondent: Shri Pawan Kumar, Authorized Representative ORDER These three appeals are directed against the impugned orders dated 24.02.2012 and 13.12.2012 whereby the Commissioner has confirmed the demand along with interest and penalties since the issue involved in all the three appeals is identical, therefore, all the three appeals are taken up together for discussion and disposal. The details of the three appeals are given here in below: Appeal No. Show cause date Period Demand of duty 1. ST/673/2012 24.02.2012 10.09.2004 to 31.03.2010 Rs. 56,89,867/- 2.ST/56028/2013 13.12.2012 2006-07 to 2009-10 12,62,922/- ST/56040/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial. It was further the stand of the appellant that Ludhiana Improvement Trust has deducted Work Contract Tax (WCT) from gross amount for depositing with VAT authorities. After following the due process, the Ld. Commissioner confirmed the demand under the category of Construction of Complex service and construction of residential complex service. 4. Heard both the parties and perused the record. 5. Ld. Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the binding judicial precedents. He further submitted that it is not disputed that the contract executed by the appellant was Works Contract which includes the material and the service element. He further submitted that the service tax on works contract was made applicable w.e.f. 01.06.2007 whereas the period involved in the present case is 10.09.2004 to 31.03.2010. He further submitted that even after 01.06.2007 service tax cannot be demanded under the category of construction of residential/commercial complex service in case of composite contract including the services as well as the material. 6. He fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of dispute as under- construction of complex means (a) construction of a new residential complex or a part thereof, or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal Joinery and carpentry, fencing and ralling, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex; 7.3 'Residential Complex was defined in section 65(91a) ibid during the disputed period as under:- residential complex means any complex comprising of (1) a building or buildings, having more than twelve residential units: (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction of residential/commercial complex service in a case of composite contract which includes services as well as the material prior to 01.06.2007. This issue is no more res integra and has been settled by the Honble Apex Court in the case of Commissioner of C.Ex. Cus., Kerala Vs. Larsen Toubro Ltd. reported in 2015 (39) S.T.R. 913 (S.C.). Further, this very issue has been considered in the various decisions cited (Supra). For the sake of convenience we will refer here the decision of the Real Value Promotors Pvt Ltd cited (Supra) wherein coordinate Bench of the Tribunal has discussed all the provisions regarding construction of complex service residential/complex and Works Contract service which was introduced w.e.f. 01.06.2007 and has held as under : 7.5 There was considerable litigation on the issue whether service tax can be levied on indivisible works contract prior to its introduction from 1.6.2007 which was finally settled by the Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. Larsen Toubro Ltd. reported in 2015 (39) STR 390 (SC) = 2015-TIOL-187-SC-ST. The Hon'ble Apex Court held that the taxable services of 'consulting engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as CICS or CCS, the service provider concerned will be rendering only service contract only. Based on the Hon'ble Apex Court judgment in Larsen Toubro, such composite works contract then will not be liable to service tax levy prior to 1.6.2007. On the same ratio, such composite contracts even for the period after 1.6.2007 disputed in these appeals will still have to be held as simpliciter without any other element in them namely without any material or goods supply involved. That is definitely not the case in the facts of these appeals. The activities of the appellants will therefore continue to be in the nature of composite works contract services and hence even after 1.6.2007 for the periods disputed in these appeals they cannot be brought within the fold of commercial or industrial construction service or construction of complex service as proposed in the show cause notices and confirmed in the impugned orders. 7.8 On the contrary, being composite works contracts, they will necessarily fall within the ambit of works contract service as defined under Section 65(105) (zzzza) ibid. It is possibly with this intent in mind that the lawmaker have included in the definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (zzq) of the Finance Act, 1994. In such situation, we note that it cannot be a case of simple mentioning of wrong provisions of law as submitted by the Revenue. Apparently, the tax liability of composite works contract is to be considered under works contract services only as per legal position settled by the Hon'ble Apex Court in M/s L T Limited. Even in the appeal, the Revenue submitted that the respondent were engaged in construction services liable to tax under tax entry Section 65(105) (xxg). The grievance of the Revenue is with reference to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity. b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai- 2018-TIOL-360-CESTAT-MUM, in respect of identical issue for the period from 2005 to 2012, the Tribunal in para 7 has held as under:- 7. On careful consideration of the submissions made by both the sides, we find that the issue falls for consideration is whether the services rendered by the appellant in respect of 52 contracts entered with various Govt. authorities need to be taxed under MMRC/CICS/ECIS or othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross wake of the works contract the value of properly in goods transferred in the execution of a works contract. 10. In view of this specific decision and the admitted claim of the appellant that they are not providers of commercial or industrial construction service ' but of ' works contract service, no tax is liable on construction contracts executed prior to 1st June, 2007. 11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviability of tax for rendering 'works contract service' . On the contrary, the submission of the appellant that they had been providing 'works contract service had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws has arrived at the following findings which are reproduced in para 8 9 : 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service in the light of the Hon'ble Supreme Court judgment in Larsen Toubro (supra) upto 1.6.2007 b. 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)(zzzą) will continue to be attracted only if the activities are in the nature of services simpliciter. c. For activities of construction of new building or civil structure or new residential complex c etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Mumbai Tribunal in Ashish Ramesh Dasarwar v. Commissioner of Central Excise Service Tax Nagpur (2017-TIOL-3230-CESTAT-MUM) The Division Bench of the Tribunal held as follows: 6. As regards the period after 1-6-2007, since the demand was raised under commercial or industrial construction service whereas admittedly the service is correctly classifiabile under works contract service, the demand raised under wrong head of service cannot sustain. 7. As per above discussion, the demand raised under commercial or industrial construction service shall not sustain. Hence, the same is set aside. 20 . In M/s Choudhary Stone Crushing Company v. Commissioner of Central Excise and Service Tax, Jaipur-II [2019 (3) TMI 38-CESTAT, New Delhi), the Tribunal observed as under:- 8. For period commencing on 1-6-2007 the composite services would be liable for classification under Works Contract Service only But we note that Show Cause Notice has proposed the demand for service tax under the category of Commercial and Industrial Construction Service as well as Repair and Maintenance Service. Hence we are of the view that the confirmation of demand under the categor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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