Composite works contract goods component not liable to service tax where the levy applies only to taxable services.

The levy under the Finance Act applies only to taxable service and does not extend to goods used in executing a composite supply and installation contract for fire safety systems. The text distinguishes the goods component from the service component in a works contract and states that attempting to tax the goods portion was impermissible. On that basis, the goods used in execution were not liable to service tax, and the appeal was allowed.

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Issues: Whether the goods used in the execution of supplying and installation of fire safety systems could be subjected to service tax under the Finance Act.

Analysis: The dispute turned on the distinction between goods and taxable service in a composite works contract. The order records that the levy under the Finance Act is confined to taxable service and does not extend to goods used in execution of the contract. Since the adjudication sought to tax the goods component, it was held to be impermissible.

Conclusion: The goods used in the execution of the supply and installation contract were not liable to service tax, and the appeal was allowed.

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