2024 (2) TMI 504

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....2. The brief facts are the appellant is engaged in electrical contract works to various Government Departments and are subjected to Sales Tax/VAT. The gross contract receipts are treated as indivisible/composite contract and subjected to TDS as per the provisions of Section 194C of Income Tax Act, 1961. The appellant is registered with the Service Tax under the category of "Erection, Commissioning or Installation Services". The appellant was issued with a show-cause notice for demand on service tax on "Erection, Commissioning or Installation Services" and "Rent-a-Cab Operator Service" and why the abatement of 67% on Erection, Commissioning and Installation Service and 60% on Rent-a- Cab service claimed by the appellant should not be demande....

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....hat VAT is paid on some goods during the supply of the same while rendering the taxable service does not mean that the appellant is not liable to pay service tax on service portion; it is evident that the appellant is not taken any Cenvat credit on the material supplies and therefore 67% abatement under Notification No. 19/2003- ST dated 21.08.2003 should be extended; the Rent-a-Cab service was rendered by the appellant separately on monthly contract basis and it is not connected to any other service rendered by the appellant, hence the demand was correctly confirmed under the category of Rent-a-Cab Service; in this case also no Cenvat credit or benefit of general exemption on the cost of material was claimed by the appellant hence they are....

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....d that no one can be taxed by implication and the charging section should be construed strictly so as to bring a person within its ambit, it is submitted that the above mandate is totally ignored in the impugned order; it is well settled law that the provision of taxing statute has to be interpreted strictly and there is no scope for intendment, in CIT Vs. Provident Investment Co. 1957 (32) ITR 190 (SC), the Supreme Court held, "if the Revenue satisfies the Court that a case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of taxing statute, no tax can be imposed by inference or analogy or by trying to probe into the intentions....

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....ed Tax, consequent upon the amendment to the Constitution of India and insertion of the Article 363 by virtue of this insertion the scope of tax on sale or purchase of goods was enlarged by a deeming fiction, which had the effect of holding the non-sale transaction as sales transaction liable to Sales Tax,by virtue of this amendment, the appellant pays Sales Tax/VAT on 100% value of their contract and therefore it is an undisputed fact that they are engaged in the execution of Works Contract which is indivisible and composite in nature.The appellant submits that the Department has ignored the clarification of the Ministry of Finance (TRU) in its Circular No. B1/16/2007-TRU dated 22.05.2007, which is reads as under: "9.1. Works Cont....

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....2.05.2007. The appellant further submits that the Hon"ble Supreme Court in the case of CCE Vs. Larsen & Toubro Ltd. 2015 (39) S.T.R 913 (SC) has clearly laid down that the works contracts shall be chargeable to service tax w.e.f 01.06.2007 and not earlier; the impugned period being 01.07.2003 to 31.03.2006 and having undertaken purely works contracts the same are not liable to service tax in view of the Hon"ble Apex Court decision; the Hon"ble CESTAT in the case of Ishwar Electric Company Vs. CC , CE & ST, Belgaum in its Final Order 21598/2018 dated 09.10.2018 following the decision of the Hon"ble Supreme Court in the case of Larsen & Toubro held that works contract are chargeable to service tax only from 01.06.2010, hence their activity be....

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....sets of agreement with the service receiver, one for the supply of material and one for the supply of service i.e erection service. The learned Commissioner has held that since the contract is entered separately for supply of materials and for erection service, the work executed by the appellant is not composite in nature and therefore, the erection service is liable for service tax under "Erection, Commissioning or Installation Service". The appellant contended that the revised letter of award of contract dated 19.07.2006 on which reliance was placed by the Department is not for the impugned period and therefore the same cannot be considered for demanding service tax on Erection services executed by them as only Erection, Commissioning or ....