TaxTMI 
TaxTMI 
2019 (2) TMI 142
X X X X Extracts X X X X
X X X X Extracts X X X X
....mand along with interest and imposed penalties, which was upheld by the Commissioner (Appeals). Hence this appeal. 2. The learned counsel Shri V.S. Manoj submitted that prior to 01.06.2007, the demand cannot sustain for the reason that the of the appellants are in the nature of composite contracts involving both supply of materials and services. The decision of the Hon'ble Apex Court in the case of Commissioner of Central Excise & Customs, Kerala vs M/s, Larsen & Touboro Ltd., reported in 2015 (39) S.T.R.913 (S.C.) is applicable to the facts of the present case and the demand prior to 01.06.2007 cannot sustain. After 01.06.2007, the demand is made under the very same category, whereas, the Tribunal in the case of M/s. Real value Promoter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r is reproduced as under:- "There was considerable litigation on the issue whether service tax can be levied on indivisible works contract prior to its introduction from 1-6.2007 which was finally settled by the Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. Larsen & Toubro Ltd. reported in 2015 (39) STR 390 (SC)" The Hon'ble Apex Court held that the taxable services of 'consulting engineer under section 65(105)(g) of the Finance Act; erection, 'commission and installation services' under section 65(105)(zzd) of the said Act; 'technical testing and analysis' under section 65(105)(zzh) ibid; 'construction services' under section 65(105)(zzq); construction of complex services under section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es. Another ground for demand is that the appellants have not exercised their option for payment of service tax under Works Contract (Composition Scheme-for payment of service Tax), Rules 2007. In any case the show cause notice implicitly agree that the work performed by the appellant is in the nature of composite works contract only. Based on the Hon'ble Apex Court judgment in Larsen & Toubro, such composite works contract then will not be liable to service tax levy prior to 1.6.2007. On the same ratio, such composite contracts even for the period after 1.6.2007 disputed in these appeals will still have to be held as composite works contract only and not pure service simpliciter contracts that could be classified under commercial or in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 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". 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(705)(zzzza) i.e. Works Contract Services. As pointed out by the ld. counsels for appellants, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was classified under the respective taxable service prior to 1-6-2A07. This is because 'works contract' describes the nature of the activity more specifically and" therefore. as per the provisions of Section 654 of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date." Thus, for example while construction of a new residential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(LO5)(zzzza) Explanation (c)" For both these categories for the definition of residential complex the definition given in section 65(105)(91a) will have to be adop....