TaxTMI 
TaxTMI 
2025 (6) TMI 1173
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.... Power Corporation. As per the Agreement, the cost of construction services included cost of material used by the appellant and since it is composite contract, it is classifiable under 'works contract service'. Appellant used to discharge taxes on sale of goods. Alleging that the appellant is liable to pay service tax, proceedings were initiated and adjudication authority as per the impugned order confirmed the demand for the period from 15.10.2004 to 31.01.2007 under 'Commercial or Industrial Construction Service' by invoking extended period of limitation and also penalty was imposed. Aggrieved by the said order, present appeal is filed. 2. When the appeal came up for hearing, the learned Chartered Accountant (CA) submits that the contrac....
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....the revenue that several exemption notifications have been granted qua service tax "levied" by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be 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.' It is evident from the above that the Composite Contracts involving goods and services are liable to service tax only from 01.06.2007 as submitted by the appellants. We find from the facts of the case that it is not disputed that the services rendered by the appellants are not in the nature of Composit....
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....hereas it was issued only on 17.4.2009, hence it is time barred. 2.2 As regarding penalty, the learned counsel submits that when demand itself is not sustainable, the question of interest or penalty does not arise. He submits that it is natural corollary that when the principal is not payable there can be no question of paying any interest. To butress his claim, he relied on the decision rendered in the case of Prathiba Processor vs. UOI: 1996 (88) ELT 12 (SC). 3. Learned Authorised Representative for the Revenue reiterated the findings in the impuged order. 4. Heard both sides. It is an admitted fact that appellant had carried out activities under composite contract and as per the findings in the impugned order at para 4, the adjudicati....