2014 (7) TMI 787

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....e case are that the Applicant had entered into agreements with West Bengal State Government for execution of various projects prior to 1-6-2007. The Applicant had been registered with the Service Tax Department on 9-1-2006 under the category of "commercial or industrial construction service" and "GTA service". These projects were in the nature of 'works contract', hence, on levy of service tax on 'works contract' with effect from 1-6-2007, they have exercised their option through their letter dated 12-7-2007 to discharge service tax @2% on the said ongoing projects under Rule 3(1) of Works Contract (Composition Scheme for Payment under Service Tax) Rules, 2007 (here-in-after as Works Contract Rules) issued under Notification No. 32/2007-S.T....

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.....T., dated 24-8-2010. In view of the said Circular, the 'works contract', where provision of services commenced prior to 1-6-2007, qualifies for the said Scheme, when payments were received after 1-6-2007. He has contended that the Applicant have received payments from the said projects only in August, 2007, therefore, they were eligible for the said Scheme. Further, he has submitted that the demand was issued on the allegation that they had not exercised option under sub-rule (3) of Rule 3 of the said Works Contract Rules and the learned Commissioner has travelled beyond the scope of the show cause notice and confirmed the demand under a different set of grounds. The said action of the Adjudicating Authority is beyond the scope of the Noti....

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....g their intention clear to the Department that in view of the said Works Contract Rules, they shall be paying the service tax @ 2% on the payments received from their ongoing projects after 1-6-2007. As per the Annexure to the show cause notice, we find that the payments were received from August, 2007 onwards. Further, we find from the said letter that it was acknowledged by the Department on 10-9-2007. In view of the Circular dated 24-8-2010, the Applicant are entitled to the benefit of the said Scheme in discharging service tax @ 2% for the provision of services commenced prior to 1-6-2007, but when no payment of service tax was received till the taxpayer opted for the said Scheme after its coming into effect from 1-6-2007. In the presen....