Composite works contract for supply and erection not taxable as construction service for the pre-01.06.2007 period.

Composite contracts for fabrication and erection of sliding gates, rolling shutters and similar works, when undertaken on a works contract basis, could not be taxed as Commercial or Industrial Construction Service for the pre-01.06.2007 period. The contracts were consistently described as composite supply-and-erection arrangements, and the show cause notice itself acknowledged that character. In view of the settled legal position for the relevant period, the service tax demand was unsustainable, the impugned order was set aside, and relief followed in favour of the assessee.

---

---

Issues: Whether composite contracts for fabrication and erection of sliding gates, rolling shutters and similar works undertaken on works contract basis were liable to service tax under Commercial or Industrial Construction Service for the period prior to 01.06.2007.

Analysis: The activity was consistently described as a composite contract involving supply and erection, and the show cause notice itself acknowledged the composite nature of the contracts. For the period in question, such works contract activity could not be taxed under Commercial or Industrial Construction Service in view of the settled legal position governing pre-01.06.2007 periods.

Conclusion: The demand was unsustainable and the impugned order was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessee obtained consequential relief as per law.

Ratio Decidendi: A composite works contract for supply and erection cannot, for the relevant pre-01.06.2007 period, be assessed as Commercial or Industrial Construction Service when the activity is in substance works contract.

---