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2025 (8) TMI 893
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....tered into the contract prior to 01.06.2007 and paid service tax on 33% of total amount received. It was also found that for the period after 01.06.2007 they paid service tax at the rate of 2.06% applicable to the taxable service provided under 'Works Contract service'. As the contract was entered prior to 01.06.2007, for the taxable service viz., Commercial or Industrial Construction service or complex service, it was alleged that they were not eligible for classification as a single composite service for the purpose of payment of service tax on or after 01.06.2007 and they were not entitled to avail the Composition scheme under Works Contract service and were liable to pay service tax on the gross value received for the completion and finishing service provided. Further, it was noticed that the Appellant had paid service tax @ 2.06% instead of 4.12% with effect from 01.03.2008 on the taxable income realized. Hence, two show cause notices dated 23.04.2010 and 18.04.2011 respectively covering the period from Apr'2007 to Oct'2009 were issued and after due process of Law finally which resulted in the confirmation of the demand as proposed along with Interest and penal....
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....he case of BSNL vs UOl-2006(2) STR 161 (SC). vi. The Tribunal Chandigarh in the case of M/s.Kumar Builders Vs. Commissioner of Service Tax in Appeal No. 1453 of 2010 date of decision 12.05.2023 has stated as given below: - i) In Para 2: CBEC circular, clarifying that a service in existence before 01.06.2007 cannot be changed, is not binding on the Tribunal as held by the Honourable Supreme Court in the case of Commissioner of C.EX. Bolpur Vs. Ratan Melting & Wire Industries [2008 (231) E.L.T .22 (S.C)] and as per Hon'ble Bombay high Court in the case of Century Rayon Vs. Union of India [2002 (142) E.L.T. 319 (Bom.)]. ii) In Para 5: It is clear that it talks of the involvement of material and it does not provide for the bifurcation of the material and service portion, Therefore, it has to be concluded that the contract is a composite one and not vivisectable and qualifies to be 'works contract'. Finally, it was submitted that the service tax paid by the Appellant is as per law and prayed to set aside the impugned order. 6. Per Contra, the Ld. Authorized Representative Mr. Harendra Singh Pal representing the Department affirmed t....
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....gs 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, (e) 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, (iv) commerce or industry, or work intended for commerce or industry, but does not include such service provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams;" 10.1 We find that the Appellant has entered into contracts which according to the Appellant are covered under section 65(25b) (a) construction of a new building or a civil structure or a part there of. The Appellant claimed abatement of 67% of total value of the contract and paid service tax at 12.24% (service tax 12% and Cess 2%) on the abated value till 31.05.2007. On the other hand, the Department's contention was that they are classifiable under section 65(25b) (c) of the Finance Act and that they are not eligible for the abatement of 67% under Notification N....
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....6.2005. 10.4 We find that after introduction of Works contract services w.e.f. 01.06.2007, the construction and finishing services are covered under 65(105)(zzzza) of Finance Act, 1994 and are to be taxed accordingly. It is not disputed anywhere that materials have not been used in the Contract by the Appellant and that that they are registered with TN VAT and paying sales Tax thereon. The Appellant have enclosed Sales Tax returns with the paper book and the names of all the service recipients figure therein. 10.5 The Ld. Counsel pointed out that the ratio of the decision of the Hon'ble Supreme Court in CCE, Kerala vs. Larsen & Toubro Ltd. [2015 (39) S.T.R. 913 (S.C.)], wherein it was held that the provisions of Section 65(105)(g), 65(105)(zzd), 65(105)(zzh), 65(105) (zzq) and 65(105)(zzzh) were not sufficient for levying service tax on indivisible composite works contracts prior to 01.06.2007. The Hon'ble Supreme Court in the case of Commissioner of Central Excise & Customs Versus M/s. Larsen & Toubro Ltd. and others [2015 (8) TMI 749 - Supreme Court] has decided as follows: - "24. A close look at the Finance Act, 1994 would show that the five taxable services re....
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....ed with consequential benefits, if any, as per law." 10.7 Further we, also note that in para 10 of the OIO and 2.2 of the SCN's, it has been recorded that the identical case of the Appellant which was earlier confirmed by the Commissioner, is pending in appeal before the Hon'ble CESTAT, Chennai, where the Tribunal has stayed the recovery for which the demand period involved is from 16.6.2005 to 30.9.2007 i.e. the period prior to the present Appeal. We further observe that the SCN in this case was issued vide SCN No 75/2008 dated 31.3.2008 which is prior to the date of issue of SCN's in the impugned order. We find that this is an already decided issue for the Appellant partly in their favour, but not cited or relied upon by them. 10.8 In the Appellant's own case, Chennai Tribunal in M/s. Ocean Interiors Pvt. Ltd. Versus Commissioner of Service Tax, Chennai [2017 (12) TMI 90 - CESTAT CHENNAI], has held as follows: - "5. The department has issued the show cause notice alleging that the construction services would come under 'completion and finishing services' which is only sub-category of Commercial or Industrial Construction Service. That therefore the appellants a....
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....te of Tax on the works contract composition scheme applicable as it stood on the date of completion of services. The Ld. Advocate has relied upon Rule 4 of Point of Taxation Rules, 2011 which states that in a case a taxable service has been provided before the change in effective rate of tax, and where the invoice has been issued prior to the change in effective rate of tax but the payment is received after the change in effective rate of tax, the point of taxation shall be the date of issuing of invoice (Rule 4(a)(ii). The liability to pay service tax is after receipt of the money for the services rendered or at the time of receipt of advance for the services to be rendered in future and as their services were completed on 21.02.2008 and the applicable rates under the compounding scheme was 2.06%, and as the same was paid by them, their payment of service tax in respect of this contract is in order. 11.2 We find that the above said Rules were not notified during the period in dispute and the same cannot be cited in the present context and we rule out their application in this case. 11.3 On the other hand, the LAA has recorded in his order that vide Notification No. 7/2008-ST....
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....facts. The First SCN covering the extended period came to be issued only in 23.04.2010, and the second SCN dated 18.04.2011 covering the period from October 2008 and September 2009 was issued under the normal period and both of them were the result of Audit of Accounts of the Appellant. 12.3 We note that the respondent has cited suppression of facts to invoke Proviso to Section 73(1) of FA 1994 to demand under larger period of limitation. We find that Proviso to Section 73(1) of Finance Act 1994 reads as hereunder: "Provided that where any Service Tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful misstatement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of Service Tax, by the person chargeable with the Service Tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "one year", the words "five years" had been substituted." 12.4 We further note that the Appellant has been filing th....