2023 (7) TMI 58

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....ction 65(25b) of  the Finance Act, 1994, for the construction work executed by the Appellant during the period 01.04.2005 to 31.03.2007, in respect of the following projects: (i) Garment Park for West Bengal Industrial Development Corporation Ltd, (ii) Malda Food Park for West Bengal Processing and Horticulture Development Corporation and (iii) Ash Handling System for DC Industrial Plant Services Ltd., 2. The Notice was adjudicated by the Commissioner vide Order-in- Original dated 04.11.2011, wherein the demand of service tax was confirmed along with interest and penalty equivalent to the service tax confirmed under Section 78 of the Finance Act, 1994. Aggrieved against the impugned order, the Appellant ha....

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....ices are classifiable as 'Work Contract' service which was not liable to service tax during the period involved in the Impugned order. The Appellant submitted that they have paid VAT on the above said work contract service. 8. We observe that 'Work Contract Service' was liable to service tax only w.e.f. 01.06.2007. Prior to this date no service tax was liable to be paid on 'Work Contract' service. We find that the issue has already settled by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Kerala Vs Larsen & Toubro Ltd.,- 2015 (39) STR 913 (SC). In this judgment, the Hon'ble Supreme Court has observed as under: "16. At this stage, it is important to note the scheme of taxation under our Constitution. In ....

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....entrench upon the Union List and tax services by including the cost of such service in the value of the goods. Even in those composite contracts which are by legal fiction deemed to be divisible under Article 366(29-A), the value of the goods involved in the execution of the whole transaction cannot be assessed to sales tax. As was said in Larsen & Toubro v. Union of India [(1993) 1 SCC 364] : (SCC p. 395, para 47) :-  "The cost of establishment of the contractor which is relatable to supply of labour and services cannot be included in the value of the goods involved in the execution of a contract and the cost of establishment which is relatable to supply of material involved in the execution of the works contract only can be ....