TaxTMI 
TaxTMI 
2020 (7) TMI 28
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 31/03/2009 are classifiable under "Construction of Complex Service (Residential)" or "Commercial or Industrial Construction Service", and reject the classification made by the assessee under "Works Contract Service" and to disallow the option for payments of Service Tax and Education Cess under "Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007" for the ongoing project prior to 01/06/2007 for the period from June 2007 to March 2009. iii. I hereby confirm an amount of Rs. 12,49,16,628/- (Rupees twelve crore forty nine lakh sixteen thousand six hundred and twenty eight only) being service tax, education cess and higher & secondary education cess short paid by the assessee on the taxable services rendered during the period 01/12/2005 to 31/03/2009, under proviso to Section 73(2) of the Finance Act, 1994 (as detailed in annexure B to the show-cause notice). iv. I order that the assessee shall pay interest at the appropriate rate on the amount confirmed above under Section 75 of the Finance Act, 1994; v. I impose a penalty on the notice under Section 76 of the Finance Act, 1994, calculated @ Rs. 100/- (Rupees one hundred only) for eve....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riate rate on the amount confirmed above under Section 75 of the Finance Act, 1994; iv. I impose a penalty on the notice under Section 76 of the Finance Act, 1994, calculated @ Rs. 200/- (Rupees two hundred only) or 2% of such tax per month, whichever is higher, subject to a ceiling that the total amount of the penalty payable shall not exceed the service tax, education cess and secondary & higher education cess payable for the period. 2. Briefly the facts of the present case are that the appellant is a private limited company engaged in the business of providing construction service to its clients as per agreements executed by them. Appellants are also registered under the Central Excise for the purpose of payment of service tax and are engaged in construction of various commercial buildings as well as residential complexes. Service tax was imposed under "Commercial or Industrial Construction Service' (CICS, for short) w.e.f. 10/09/2004, on Construction of Complex Services (Residential) (CCS, for short) w.e.f. 16/06/2005 and "Works Contract Service' (WCS, for short) w.e.f. 01/06/2007. The appellant had been paying service tax on the taxable value determined after avail....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ling such cenvat credit also. This practice was followed by the appellant both in respect of existing contracts as on 01/06/2007 on which they were paying service tax under CICS/CCS by claiming 67% abatement and new contracts undertaken after 01/06/2007. The show-cause notices issued by the Revenue alleged that the service would continue to be classified under CICS/CCS and changing the classification into WCS midway is not permissible. Even in respect of fresh contracts after 01/06/2007, it was alleged that appellant is liable to classify the same only under CICS/CCS, since they have not exercised their option to pay the service tax under the composition scheme under WCS. Accordingly both in respect of the ongoing contracts and fresh contracts, demand of service tax has been made under CICS/CCS without granting the benefit of 67% abatement on the ground that some of the material were supplied by the customers. After following the due process, the Commissioner vide the impugned order confirmed the demand in both the show-cause notices. 3. Heard both the parties and perused the records. 4.1. Learned counsel for the appellant submitted that the impugned order is not sustainable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... post 01/06/2007 is not at all sustainable and liable to be set aside. He further submitted that the appellant in fact post 01/06/2007 has been paying service tax under WCS under composition scheme both in respect of ongoing contracts as well as fresh contracts. He further submitted that apart from cement and steel supplied by the customers, all other goods required for construction have been supplied by the appellant which is not in dispute and to that extent, there is an element of transfer of property of goods involved in the contracts and the appellant is also paying appropriate VAT thereon. 4.3. Learned counsel submitted that without prejudice to the foregoing stand, benefit of 67% abatement under CICS and CCS has been denied to the appellant on the ground that the gross amount charged by the appellant does not include the value of all goods, as cement and steel are supplied by the customers. In this connection, the appellant relied upon the decision of the Larger Bench of the Tribunal in the case of Bhayana Builders Pvt. Ltd. Vs. CCE [2013(32) STR 49 (Tri. LB)] rendered on 06/09/2013 wherein it has been held that while claiming abatement of 67% under these services, the va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eriod. He further submitted that the appellant have been paying service tax under CICS/CCS by claiming abatement though no service tax was held to be payable by the Supreme Court in such cases subsequently. Further the levy of service tax on construction related activities has undergone several changes during the relevant period and even the CBEC has recognized such changes in various circulars issued. Further the appellant have not suppressed any information from the Department and has been regularly filing the returns and supplying the information as and when asked by the Department. In such circumstances, there is no justification for invoking the extended period of limitation and the demand is liable to be set aside on the ground of time bar also. He also submitted that similar issue has been raised for the earlier period also and hence extended period cannot be invoked and the demand is liable to be set aside. 5. On the other hand, the learned AR reiterated the findings of the impugned order and submitted that even prior to 01/06/2007 from which WCS was introduced in the Finance Act, 1994, the construction services like CICS and CCS were subject to levy of service tax. Thes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects" The Explanation of the said provision also contained the definition of WCS. After the introduction of WCS, the appellant had started paying service tax by classifying their services into WCS and started availing the benefit of (Composition scheme for payment of service tax) under Service Tax Rules, 2007. Revenue raised the objection by issuing show-cause notices alleging that the appellant is liable to pay service tax under CICS/CCS only and changing the classification into WCS midway is not permissible. So much so, the Revenue was of the view that even in respect of the fresh con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h is reproduced herein below:- 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 residential complex etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under "Works Contract Service' as defined under section 65(105)(zzzza) ....