TaxTMI 
TaxTMI 
2025 (9) TMI 401
X X X X Extracts X X X X
X X X X Extracts X X X X
....es under comprehensive contracts and had used materials while providing these construction services, it claimed abatement of 67% of the gross amount received under exemption notification no. 1/2006-ST dated 1.3.2006. It also claimed that the construction of the building of Maharaja Vinayak Dental College was exempted being construction of building of an educational institution. 3. A Show Cause Notice [SCN] dated 24.10.2011 was issued proposing to deny the abatement under the exemption and recover differential duty of Rs. 19,56,105/- from the appellant. 4. After considering the reply, the Additional Commissioner passed order in original dated 16.1.2013 denying the benefit of abatement under notification no. 1/2006-ST dated 1.3.20006 and confirming demand of only Rs. 9,05,505/- with interest under section 73 of the Act and imposed an equal amount as penalty under section 78 of the Act. 5. The appellant's appeal against the order of the Additional Commissioner dated 16.1.2013 was dismissed by the Commissioner (Appeals) by order dated 23.4.2014 because the appellant had not made the pre-deposit as directed. On appeal, this Tribunal, by order dated 4.4.2016, remanded the matter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....carefully gone through the records of the case, the submissions in the appeal and have heard learned authorized representative for the Revenue. 9. The short question to be answered is if the appellant was liable to pay the differential service tax confirmed in the impugned order by denying the abatement of 67% under exemption notification 1/2006-ST or not. 10. Before we examine this issue, it will be necessary to understand the basic scheme of Service Tax and how it evolved over years. Service tax is levied under Finance Act, 1994. Section 66 of this Act is the charging section which levied tax on 'taxable services' rendered. Taxable services were defined in various clauses of section 65 (105). Initially, service tax was levied only on few services and it was extended to more services from time to time by adding new clauses under section 65(105). 11. On 1.6.2007, some types of works contracts were made taxable under 'works contracts service' by inserting clause (zzzza)in section 65(105). Works contracts are those contracts in which the service is rendered along with transfer or deemed transfer of property in goods; i.e, if goods are used by the service provider while rende....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d separately as such. In Gannon Dunkerley, 1959 SCR 379, this Court recognized works contracts as a separate species of contract as follows :- "To avoid misconception, it must be stated that the above conclusion has reference to works contracts, which are entire and indivisible, as the contracts of the respondents have been held by the learned Judges of the Court below to be. The several forms which such kinds of contracts can assume are set out in Hudson on Building Contracts, at p. 165. It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration, and the other for payment of remuneration for services and for work done. In such a case, there are really two agreements, though there is a single instrument embodying them, and the power of the State to separate the agreement to sell, from the agreement to do work and render service and to impose a tax thereon cannot be questioned, and will stand untouched by the present judgment." (at page 427) 18. Similarly, in Kone Elevator India (P) Ltd. v. State of T.N. - (2014) 7 SCC 1 = 2014 (34) S.T.R. 641 (S.C.) = 2014 (304) E.L.T. 3 (S.C.), this ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ligations of supply of goods and materials and performance of labour and services, some additional obligations are imposed, such contract does not cease to be works contract. The additional obligations in the contract would not alter the nature of contract so long as the contract provides for a contract for works and satisfies the primary description of works contract. Once the characteristics or elements of works contract are satisfied in a contract then irrespective of additional obligations, such contract would be covered by the term "works contract". Nothing in Article 366(29-A)(b) limits the term "works contract" to contract for labour and service only. The learned Advocate General for Maharashtra was right in his submission that the term "works contract" cannot be confined to a contract to provide labour and services but is a contract for undertaking or bringing into existence some "works". We are also in agreement with the submission of Mr. K.N. Bhat that the term "works contract" in Article 366(29-A)(b) takes within its fold all genre of works contract and is not restricted to one specie of contract to provide for labour and services alone. Parliament had all genre of works....