TaxTMI 
TaxTMI 
2025 (7) TMI 73
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....lectrification work. During the period 2005-06 to 2008-09,the appellant performed the work of fixing the poles, wiring the poles, fixing of street light and laying of cables. The appellant was neither registered under Service Tax nor did they pay any Service Tax. As the appellant was not registered, hence, the composition scheme was not available to them. The Department formed an opinion that as Form VAT-41 issued by Senior Account Officer Jodhpur i.e. awarder of work contract, revealed that they had deducted VAT @3%, whereas VAT is deducted only in the case of works contract, and the work done by the appellant was covered under the definition of Erection, Commissioning & Installation Service and Works Contract Service as defined under Section 65(105) (zzd) & 65 (105)(zzzza) of the Finance Act, 1994 respectively. Therefore, the appellant appeared liable to pay Service tax at the appropriate rate prevalent at the relevant time. The appellant had not disclosed the material facts to the department either in letter form or in ST-3 returns. Further, the appellant had not furnished the details willingly to the department in spite of the fact that a number of letters issued to the appella....
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....nable on above grounds. Therefore, the demand confirmed cannot be upheld under main section 73(1) even for normal period. He submitted that section 73 had been amended vide Finance Act, 2013 and Section 73(2A inserted) on 10.05.2013 (effective from 01.07.2012) to take care of such situation and that after passing of the Bill, in such cases of notices issued on or after 10.05.2013, demand for normal period is sustainable if the same is hit by limitation. The amendment is effective from 01.07.2012 as was expressly provided in the Finance Act, 2013. In this regard, the learned counsel relied on the decision of Hon'ble Supreme Court in Collector of Central Excise, Jaipur vs. Alcobex Metal 2003 (153) ELT 241 (S.C.) and the decision of Calcutta High Court in Infinity Infotech Parks Ltd. Vs. Union of India 2014 (36) STR 37 (Cal.). He submitted that the Tribunal had also followed the same in Scorodite Stainless India Pvt Ltd. Vs. Commissioner of Central Excise, Jaipur-II Final Order No. 58798 of 2017 dated 01.12.2017. 3.2 Learned counsel further submitted that even if the demand was not hit by limitation, the appellant was eligible for the benefit of notification No. 6/2005-ST and w....
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....or to 1.6.2007 and after 1.6.2007. In the instant case, from the nature of work carried out by the appellant, it was evident that during the period 1.10.2004 to 31.05.2007, the services were covered under the scope of erection, commissioning or installation service. The argument of the appellant that the services if classified under the Works Contract Service with effect from 1.6.2007 cannot be classified under any other service prior to this date was unfounded. Learned Authorized Representative contended that it is evident from the definition of the 'erection, commissioning or installation' and „Works Contract Service' that there is no difference in phraseology used. However, the sine qua non for the Works Contract Service is that the property in goods should pass to the service receiver and VAT or Sales tax should be paid on that property. Therefore, even after introduction of Works Contract Service, if the two conditions were not fulfilled, the same activity would fall under other category of taxable services. Therefore, the argument of the appellant is not legally tenable. 4.2 Learned Authorized Representative further submitted that the entry "Service in relati....
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....on of penalty under Section 78 of the Finance Act, 1994 is warranted and the appellant is liable for penalty under Section 78 of the Finance Act, 1994. 5. We have heard the learned Chartered accountant for the appellant and the learned Authorised Representative for the department. The issue before us is whether the appellant had provided Erection and Commissioning service or works Contract Service during the period under dispute. A perusal of the facts of the case is that the appellant had provided Erection, Commissioning or Installation Service as well as Works Contract Service to M/s Jodhpur Development Authority and Nagar Nigam, Jodhpur and other authorities but they did not pay the applicable service tax on such services nor had taken registration under service tax. We find that the impugned order itself has noted that the appellant had provided Works Contract Services. The relevant paras are reproduced hereinafter:- "5.2. The appellant had provided services relating to street lighting, electrification work a public roads, temporary lighting on National Festival and electrification work at Nyas Bhawan etc mainly as per work orders given by Jodhpur Development Author....
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....owards labour and services. Such deductions are stated by the Constitution Bench to be eight in number. What is important in particular is the deductions which are to be made under sub paras (f), (g) and (h). Under each of these paras, a bifurcation has to be made by the charging Section itself so that the cost of establishment of the contractor is bifurcated into what is relatable to supply of labour and services. Similarly, all other expenses have also to be bifurcated insofar as they are relatable to supply of labour and services, and the same goes for the profit that is earned by the contractor. These deductions are ordinarily to be made from the contractor's accounts. However, if it is found that contractors have not maintained proper accounts, or their accounts are found to be not worthy of credence, it is left to the legislature to prescribe a formula on the basis of a fixed percentage of the value of the entire works contract as relatable to the labour and service element of it. This judgment, therefore, clearly and unmistakably holds that unless the splitting of an indivisible works contract is done taking into account the eight heads of deduction, the charge to tax that w....
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....execution of a works contract. xxxxxxxxx 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite work contracts, such arguments must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services." 5.2 The Hon'ble Supreme Court held that the Section 65(105) of the Finance Act, 1994 refers only to service contracts simpliciter and not to composite works contracts - It defines "taxable service" as "any service provided", and all its sub-clauses refer to service contracts simpliciter without any other element in them. In the instant case, the impugned order has noted that all works done by the appellant in 2005-06 to 2008-09 involved both goods and services, hence services rendered during 01.04.2005 to 31.05.2007 also involved goods, therefore, the demand confirmed for this period is liable to be set- aside. We are in agreement with findings of the Commissioner (Appeals) 5.3 However, we note that the impugned order ha....