TaxTMI 
TaxTMI 
2019 (1) TMI 1432
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....es provided by them. It was also noticed that the appellant did not pay service tax on the payments in respect of which the recipients did not agree to pay the service tax portion. 1.3 Accordingly, a Show Cause Notice dated 15.04.2009 was issued proposing to demand service tax of Rs. 64,26,673/- under proviso to Section 73(1) of the Finance Act, 1994 along with interest under Section 75 of the Act and also penalty under Sections 76 and 78 of the Act ibid. After due process of law, the lower adjudicating authority vide impugned Order-in-Original No. 50/2010 dated 29.10.2010 confirmed the demand of Rs. 62,67,700/- in terms of Section 73(1) ibid. for the period from November, 2006 to November, 2008 after appropriating Rs. 1,58,973/- being the service tax paid before the visit of the Departmental Officers, interest in terms of Section 75 and also imposed penalty of Rs. 63,00,000/- under Section 78, but however dropped the penalty under Section 76 ibid. The amount of Rs. 36,58,956/- paid by the appellant was also appropriated against the above confirmed demand. Aggrieved by the same, the appellant has come in appeal before this forum. 2. Today when the matter came up for hearing, ....
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.... been rightly made under WCS although there was no proposal of such classification in the Show Cause Notice. He further submitted that during this period, they had also provided services to various SEZ units which were entitled for exemption as per Notification No. 04/2004-ST during the relevant period and that therefore the demand was not sustainable to that extent. He also relied on the decision of the Delhi Bench of the CESTAT in the cases of Siddha Projects Pvt. Ltd. Vs. C.C.E., Jaipur - 2017 (4) G.S.T.L. 226 (Tri. - Del.) and pleaded for waiver of penalty. 4. Per contra, Ld. AR supported the findings of the lower authorities. 5. We have heard the rival contentions, perused the documents placed on record and have also gone through the decisions referred to during the course of arguments. 6.1 In the light of the recent decision of this Bench of the CESTAT in the case of M/s/ Real Value Promoters Pvt. Ltd.(supra), we note that this Bench after considering the decisions of various fora including the decision of the Hon'ble Supreme Court, has ruled as under : "7.7 In the present appeal also, there is no dispute that the construction activities are in the nature of compo....
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....ture, it is worthwhile to reproduce excerpts from the Union Finance Minister's budget speech in 2007:- 'State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the words contract'. 7.10 The issue was analyzed by the Hon'ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65(105)(zzzza) i.e. Works Contract Services. As pointed out by the ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax unde....
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.... '7. We note that in the present case, the SCN was issued on 27.05.2011. On that date, both the tax entries, namely, Commercial or Industrial Construction Service and Works Contract Service, were available in the Finance Act, 1994. The SCN did mention this in the first para itself. However, the proposal for tax demand was specifically made under Commercial or Industrial Construction Service under Section 65 (105) (zzq) of the Finance Act, 1994. In such situation, we note that it cannot be a case of simple mentioning of wrong provisions of law as submitted by the Revenue. Apparently, the tax liability of composite works contract is to be considered under works contract services only as per legal position settled by the Hon'ble Apex Court in M/s L&T Limited. Even in the appeal, the Revenue submitted that the respondent were engaged in construction services liable to tax under tax entry Section 65(105) (xxq). The grievance of the Revenue is with reference to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity.' b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai - 20....
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....installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of properly in goods transferred in the execution of a works contract.' 10. In view of this specific decision and the admitted claim of the appellant that they are not providers of "commercial or industrial construction service" but of "works contract service", no tax is liable on construction contracts executed prior to 1st June, 2007. 11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviabil....
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.... to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have to be discharged by the appellants. So ordered.' 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service in the light of the Hon'ble Supreme Court judgment in Larsen & Toubro (supra) upto 1.6.2007 b. For the period after 1.6.2007, service tax liability under category of "commercial or industrial construction service" under Section 65(105)(zzzh) ibid, "Construction of Complex Service" under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services' simpliciter. c. For activities of construction of new building or civil structure or new reside....