Works contract composition scheme benefit cannot be denied for want of written option when tax is paid at composition rate.

The works contract composition scheme could not be denied merely because no written option was filed. Actual payment of service tax at the composition rate was treated as sufficient evidence of exercise of the option, and the Tribunal relied on its earlier view that no written intimation was required. The denial of the scheme benefit was therefore unsustainable, and the issue was decided in favour of the assessee.

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Issues: Whether denial of the benefit of the works contract composition scheme was justified on the ground that no written option was filed.

Analysis: The only dispute was whether exercise of option for the composition scheme had to be made in writing. The prior order for the earlier period had already recorded that there was no requirement of a written intimation, and that payment of service tax at the composition rate itself evidenced the assessee's intention to opt for the scheme. On the same reasoning, the Tribunal held that the actual payment of tax under the composition rate was sufficient to show exercise of option and that the benefit could not be denied merely for want of a written declaration.

Conclusion: Denial of the composition scheme benefit was unsustainable and the issue was decided in favour of the assessee.

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