TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 246
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....basis of intelligence collected by the Anti-evasion Unit of the Commissionerate and investigations conducted after obtaining various documents such as copies of work orders, balance sheets, Form 16-A issued by M/s. BSNL and statements recorded from the appellant, a Show Cause Notice vide C.No. V/ST/15/45/2010-Cx.Adj. dated 10.06.2010 came to be issued, proposing to demand Service Tax of Rs.8,70,873/- towards construction service / commercial or industrial construction service / works contract service and towards cleaning activity provided by the appellant during the period from April 2005 to March 2009, invoking the provisions of Section 73(1) of the Finance Act, 1994 and also proposing to impose penalties under Sections 76, 77 and 78 of the Act. 4. The Joint Commissioner of Central Excise and Service Tax, Tiruchirappalli held that the services rendered by the assessee would fall under the category of 'construction service' under Section 65(30a) of the Finance Act, 1994 with effect from April 2005, under 'commercial or industrial construction service' under Section 65(25b) of the Finance Act with effect from 16.06.2005 and under 'works contract service' under Section 65(105)(zzzza....
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....ers Pvt. Ltd. v. Commissioner of G.S.T. and Central Excise, Chennai & ors. [Final Order Nos. 42436-42438/2018 dated 18.09.2018 - CESTAT Chennai]; (iii) M/s. Jain Housing & Construction Ltd. v. The Commissioner of Service Tax, Chennai [Final Order Nos. 40077-40079/2023 dated 24.02.2023 - CESTAT, Chennai]; (iv) M/s. South India Shelters Pvt. Ltd. v. The Commissioner of Central Excise, Chennai [Final Order Nos. 40123-40124/2023 dated 07.03.2023]. 8.1 The Learned Authorized Representative appearing for the Revenue has reiterated the findings of the lower authorities. He submitted that the appellant had not taken Service Tax registration, had neither paid any Service Tax nor filed their Service Tax returns till the time investigation was taken up by the Department and that the services rendered by the appellant would be taxable under 'construction service' under Section 65(30a) of the Finance Act, 1994 with effect from 10.09.2004, under 'commercial or industrial construction service' under Section 65(25b) with effect from 16.06.2005 and under 'works contract service' under Section 65(105)(zzzza) with effect from 01.06.2007. 8.2 He has also contended that the levy of Service Tax on....
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.... 1994, as under: - "(25b) "commercial or industrial construction" means - (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is - (i) used, or to be used, primarily for; or (ii) occupied, or to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams;" 13. The definition of "works contract" as contained in Section 65(105)(zzzza) of the Finance Act, 1994 with effect from 01.06.2007 reads as under: - "(zzzz....
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.... taxed under these service categories, in so far as the service portion is concerned. Hence, in order to exclude the value of goods involved in such contracts, exemption notifications under section 93 have been issued to exclude a portion of value towards the value of transfer of property in goods, which is known as abatement. 3.4 Subsequently, the service portion in the composite works contracts, was specifically made as a taxable service under WCS with effect from 01.06.2007 and the manner of determination of the value of such service portion has been prescribed vide Rule 2A of the Service Tax (Determination of Value) Rules, 2006, framed under Section 94 (2) of the Act. An alternative in the form of Works Contract (Composition scheme for payment of Service Tax) Rules, 2007 has also been introduced to pay service tax at a lesser rate on the gross amount (including the value of transfer of property in goods). 3.5 The issue as to whether a composite contract involving provision of service as well as transfer of property in goods could be covered under CICS and CCS from the date of introduction of service tax levy on such services was, being litigated upon which was finally settl....
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....t the stage of adjudication or appeal proceedings, the demand cannot be confirmed under WCS, when the show cause notice raises demand on CICS/CCS. Such an attempt would amount to travelling beyond the scope of the show cause notice, which is not permissible. 3.9 Though the definition of WCS incorporates the definitions of CICS / CCS into it, the scope of coverage of these services are distinct. While the definition of CICS / CCS would cover such construction activities without involving any transfer of property in goods (Example:- Where all materials required for the construction are supplied by the service recipient and the service provider is engaged only for provision of construction service), a composite construction activity would fall only under WCS. .... .... ..... .... 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 constructio....
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.... 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 leviability of tax for rendering 'works contract service'. On the contrary, the submission of the appellant that they had been providing 'works contract service' had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2....