2018 (4) TMI 730

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....rks Contract Service". They were issued show cause notice demanding differential service tax on the ground that in terms of Rule 3 (3) of Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 , the provider of taxable service who opts to pay the service tax in relation to "Works Contract Service" shall exercise the option for payment of service tax under works contract service before exercising such option. Further that as per CBEC Circular No. 98/1/2008 - ST dt. 04.01.2008 benefit of composition scheme under "Works Contract Service' are not admissible for ongoing projects. That the Appellant suddenly changed their classification of their service from Commercial & Industrial Construction services to the Works Contract S....

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....ts on the day on which the option of composition scheme is opted. He support the findings of the impugned order. 4. Heard both the sides. We find that the issue as to whether the composition scheme under Works Contract can be opted or not in case of ongoing projects on the date when such option is exercised is no more disputed. The Tribunal in the case of B.R. Kohli Construction Pvt. Ltd. (supra) has held that such option can be exercised in case of ongoing projects also. The relevant findings of the Tribunal are as under : 4. We have heard both the sides and perused the appeal records. Admittedly, the contracts executed by the appellants are composite in nature and are rightly to be classified under tax entry "works contract service". As....

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....ntracts were taxable under 'commercial or industrial construction service'/'construction of complex service' prior to 1-6-2007 and accordingly after 1-6-2007 they cannot opt for payment of service tax under works contract service under composition scheme. We find that in view of the legal position settled by the Hon'ble Supreme Court in Larsen & Toubro Limited (supra) the appellant is not liable to any service tax in respect of these indivisible, composite works contract prior to 1-6-2007. As such, subject to fulfilment of the conditions, the appellants are eligible to discharge service tax on such works contract, after 1-6-2007, in terms of composition scheme of 2007. The reason for denial of the benefit recorded in the impugned order is ....