2019 (9) TMI 1518

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....lant and imposing penalty of an equivalent amount upon the appellant under Section 78 of the said Act. The Commissioner held that the services rendered by the appellant during the period 01.07.2003 to 31.03.2007 of providing Central Air Conditioning System to their client was not "works contract" but came under "Erection, Commissioning and Installation" under Section 65(39a) of the Finance Act, 1994 and that the appellant was liable to pay service tax on 33% of total charges as per Notification No.19/2003-ST dated 21.08.2003 which it did not, resulting in short payment of service tax as above. According to the Commissioner, the appellant was not eligible to benefit under Notification No.12/2003 dated 20.06.2003 having not satisfied the cond....

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.... of goods and (b) It should be for the purpose of carrying out erection, commissioning or installation of plant, machinery, equipment or structures, turnkey projects including engineering, procurement and construction or commissioning (EPC) projects. Both the conditions are satisfied in the case of the subject contracts. The contracts are for supply of goods and also involve erection, commissioning or installation. Further, they are turnkey projects. There is no dispute with regard to these aspects in either the show cause notice or the impugned order. Therefore the activity carried on by the appellant is a "works contract" under Section 65(105)(zzzza) of the finance Act, 1994. Hence the activity is exigible to service tax only ....

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....ction 73A of the Act. (c) On the other hand, if the then existing section, CBEC circular and the practice are followed, the appellant has to pay service tax on the value of the service rendered less the value of the goods/materials in terms of Notification No.12/2003-CE. The CA certificate regarding the value of the goods/materials may be ordered to be taken as sufficient documentary proof. 6. We have heard both the parties and perused the appeal records. 7. We find that in the instant case there is no dispute on facts. The issue to be decided is that whether the services rendered under the subject contracts by the appellant is to be classified as "works contract" under Section 65(105)(zzzza) and hence liable to service tax o....

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....t 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 property in goods transferred in the execution of a works contract." 9. In the case of Delhi Jal Board Contractors Welfare Association Vs. Union of India (supra) the Hon'ble Delhi High Court, dealing with exactly the same issue involved herein, held, following the decision of the Hon'ble Supreme Court in Larsen & Toubro Ltd.'s case (supra), that indivisible works contracts are not liable to service tax prior to 1st June 2007 under ....