2012 (6) TMI 491

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...., installation services and GTA services for which they were duly registered with the department. Subsequently, when the works contract category was introduced with effect from 1.6.2007, they have applied to the Revenue to change of registration from earlier category to work contract category. The said registration was granted to them by making amendment in the registration also. The said amendments were made as "erection and commercial and industrial construction service" as also "work contract". The said amendment was made in the certificate with effect from 23.8.2007. 3. Learned Advocate appearing for the appellant clarifies that the appellant has two units; one is civil and other mechanical. Though, the appellant has two units, he fa....

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....t exercise he said option, he held that the appellant is not eligible for the benefit of said rule. The second ground adopted by the Commissioner that in terms of provisions of Rule 3(2) no credit towards service tax paid on inputs should be taken by the appellant. Inasmuch as the appellant had taken credit of input service, he held that the Appellants not entitled to the benefit of said rule. 5. After hearing both sides, duly represented by Shri Bipin Garg, learned Advocate appearing for the appellant and Shri K.K.jaiswal, learned AR appearing for the Revenue, we find that the Revenue's main objection is absence of option exercised by the appellant before they started paying duty under the works contract. However, we find that the appel....

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....and fair construction of Rule 3(3) of the 2007 Rules, it is clear that where in respect of a works contract service tax has been paid, no option to pay service tax under the composition scheme could be exercised. There is no ambiguity in this provision. The entitlement to avail the benefits of the composition scheme is only after an option is exercised under Rule 3(3) of the 2007 Rules and this provision specifically enjoins a disqualification for exercise of such option where service tax had been paid in respect of a works contract. To put it succinctly, where service tax has been paid in respect of a works contract, the eligibility to exercise an option to avail the benefits of the composition scheme under the 2007 Rules is excluded." ....