TaxTMI 
TaxTMI 
2022 (2) TMI 1122
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.... deposited, I order the same to be appropriated to Government Account. (ii) I drop the demand of service tax amounting to Rs. 1,36,895/- under Section 73 (2) of the Finance Act, 1994. (iii) I order recovery of interest on the amount of service tax confirmed at (i) above under Section 75 of the Finance Act, 1994. (iv) I impose penalty of Rs. 10,000/- or two hundred rupees for every day during which failure to furnish information continued, under Section 77(1) (c) of the Finance Act, 1994. (v) I impose penalty of Rs. 10,000/- under Sections 77(2) of the Finance Act, 1994 for contravention of the provisions of Section 70 of the Finance Act, 1994 read with Rule 7 of the Service Tax Rules, 1994. (vi) I impose penalty equal to the amount of service tax which pertain to the period from 01.04.2008 to 07.04.2011 and confirmed at (i) above, under section 78 of the Finance Act, 1994. However, if such service tax and the interest payable thereon determined above is paid within thirty days from the date of communication of this order, the amount of penalty liable to the paid by the assessee shall be twenty-five per cent ....
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.... 6463760 4 2011-12 9073464 10.30 934567 148570 785997 5 2012-13 20593187 12.36 2545318 0 2545318 Total 191139343 21178227 366433 20811794 3. It appeared that the services provided by the appellant were covered under the category of "construction other than residential complex, including commercial/ industrial building or civil structure" and "works contract services" up to 30.06.2012. From 01.07.2012 the services rendered by the appellant appeared to not fall under the negative list. Services specified under section 65(105) were taxable prior to 01.07.2012, i.e., only such services as were specifically covered under any of the clauses of section 65 (105) were exigible to service tax. With effect from 01.07.2012, new provisions were introduced and service tax became leviable on all services except those specified in the negative list. The new charging section, Section 66B of the Act provided that "there shall be a levied tax, hereinafter referred to as service tax, at the rate of 12 per cent of value of all services other than those services specified in the negative list, provided or agreed to be provide....
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....ts that it is incorrect to say that the appellant had availed CENVAT credit and no evidence was produced by the Revenue to show that it had availed CENVAT credit. Therefore, the demand on 'Works Contract' for this period also needs to be set aside. Consequently, the demand for interest also needs to be set aside and the penalties under Section 77 and 78 cannot be imposed upon the appellant. 5. Learned Departmental representative reiterated the findings of the impugned order and submitted that the impugned order calls for no interference. 6. We have considered the submissions on both sides and perused the records. 7. It is undisputed that except one labour contract during 2010-11 valued at Rs. 3,80,544/- which is said to have been rendered by the appellant to M/s Pratibha Industries Limited, all contracts entered into by the appellant and in dispute before us were for 'Works Contract' . The demand has been confirmed under the head of 'Commercial or Industrial Construction Service' under Section 65 (25d) for the period up to 2012 thereafter on the ground that the service was not covered under the negative list. 8. Works contracts are those contract....
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....s 17, 24 to 29 and 43 to 45 of this judgement are reproduced below: "17. We find that the assessees are correct in their submission that a works contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. In Gannon Dunkerley, 1959 SCR 379, this Court recognized works contracts as a separate species of contract as follows:- "To avoid misconception, it must be stated that the above conclusion has reference to works contracts, which are entire and indivisible, as the contracts of the respondents have been held by the learned Judges of the Court below to be. The several forms which such kinds of contracts can assume are set out in Hudson on Building Contracts, at p. 165. It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration, and the other for payment of remuneration for services and for work done. In such a case, there are really two agreements, though there is a single instrument embodying them, and the power of the State to separate the agreement to sell, fro....
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....se including apportionment of the cost of establishment, other expenses and profit earned by the service provider as is relatable only to supply of labour and services. And, where value is not determined having regard to the aforesaid parameters, (namely, in those cases where the books of account of the contractor are not looked into for any reason) by determining in different works contracts how much shall be the percentage of the total amount charged for the works contract, attributable to the service element in such contracts. It is this scheme and this scheme alone which complies with constitutional requirements in that it bifurcates a composite indivisible works contract and takes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax. 27. In fact, the speech made by the Hon'ble Finance Minister in moving the Bill to tax Composite Indivisible Works Contracts specifically stated:- "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.....
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....disregarded. Since the levy itself of service tax has been found to be non- existent, no question of any exemption would arise. With these observations, these appeals are disposed of. 45. We, therefore, allow all the appeals of the assessees before us and dismiss all the appeals of the revenue." 11. Therefore, as per the judgment of the Supreme Court in Larsen & Toubro Ltd., service tax on 'Works Contract' can be levied only under the head of 'Works Contract' under section 65 (105) (zzzza) and not under any other service. Therefore, for the period up to 2012, the demand of service tax under the head of 'Commercial or Industrial Construction service' in the impugned order cannot be sustained, as undisputedly, the services rendered (except one service for 'Labour Contract' to M/s Pratibha Industries Limited for 2010-11) were 'Works Contract Services'. There is no demand under the head of 'Works Contract Service'. Therefore the demands up to 2012 cannot be sustained and needs to be set aside and we do so. 12. As far as the period post 2012 is concerned, the appellant's contention is that although they are liable to pay service tax on ....