TaxTMI 
TaxTMI 
2025 (9) TMI 753
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....on the full amount of the services provided by them under the categories of 'Construction of Complex Services' and 'Commercial or Industrial Construction Services', in as much as they had wrongly availed the benefit under exemption Notification No.18/2005-ST, 15/2004-ST and Notification No. 01/2006-ST by claiming abatement of 67% from the amount charged by them on the services provided to their clients. On scrutiny of the documents submitted by the Appellant, it was found that the Appellant had provided construction services to various projects of different developers. It was found that they have received major construction materials i.e.steel, cement & readymix concrete on 'free of cost' basis from all clients except in the case of M/s. Ansal Buildwell Ltd.. Further, it has been observed that they have not considered the cost of such material received from their clients while calculating their service tax liability. They have availed notification benefit and had paid service tax on 33% of their gross receipts. The abatement of 67% from the gross value is available only when the service provider includes the value of all materials used by him in execution of such works, the....
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....and perused the records of the case. 7. The submissions of the appellant is that they had executed "Works Contract Service" and in view of the decision of the Apex Court in CCE Vs. Larsen & Toubro Ltd.- 2015 (39) STR 913 (SC) holding that service tax on works contract was not leviable prior to the amendment introducing the definition of "Works Contract" under sub-clause (zzzza), the appellant is not liable to pay service tax for the period prior to 01.06.2007. 8. Learned Departmental Representative for the Revenue fairly accepted that the issue has been settled by the Apex Court in Larsen Toubro Ltd. and the present controversy stands concluded in terms thereof. The relevant para from the decision of the Apex Court in Larsen & Toubro Ltd. reads as under:- 17. We find that the assessees are correct in their submission that a works contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. In Gannon Dunkerley, 1959 SCR 379, this Court recognized works contracts as a separate species of contract as follows :- "To avoid misconceptio....
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....espect of roads, airport, airways transport, bridges, tunnels and dams, possibly in the national interest. The implication of the exclusion means that such contracts were never intended to be the subject-matter of the Service Tax." 9. The Apex Court in the case of Total Environment Building Systems Vs.CCT-(2022)16 SCC 219 was once again required to consider the issue "whether, Service Tax could be levied on composite works contracts prior to the introduction of the Finance Act, 2007, by which the Finance Act, 1994 came to be amended to introduce Section 65(105)(zzzz-a) pertaining to works contracts?" Both the learned Judges concurred with the view in their separate judgements rejecting the submissions of the Revenue to re-consider the decision in Larsen & Toubro Ltd., observing that the judgement of the Court in Larsen & Toubro Ltd. has stood the test of time and has never been doubted earlier. The observations made by Hon'ble Justice B.V. Nagarathna in the context of the decision in Larsen & Toubro Ltd. are quoted below:- "Therefore, it was found that the assesses were right in contending that the Service Tax charging section itself must lay down with specificity....
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.... and "commercial or industrial construction service" availing the abatement of 67% under the exemption notification, which in terms of the decision in Larsen & Toubro Ltd., they were not liable to pay. Also the Apex Court has held that in such cases, the application of exemption notifications is to be disregarded as found to be non-existent and levy of service tax on composite works contract itself is not leviable for the period prior to 01.06.2007. In the circumstances, the appellant was not liable to pay any service tax for the pre-amended period and, therefore, the issue of levy of exemption notification would also not apply. 11. The other issue raised in the impugned order is regarding the nature of work undertaken by the appellant would fall within the category of "finishing and completion service" in relation to the residential complex to M/s. Ansal Properties and Industries Limited (APIL). The nature of services provided by the appellant has been noted as electrical, sanitary, flooring, tiling, etc., which, according to the Revenue, are not finishing or completion services as specified in Section 65(30a&b) defining the expression, "construction of complex", which reads as....
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....ngly, held to be unsustainable. The said decision has been followed subsequently in extenso in the case of M/s. Jangid Interior Décor Pvt. Ltd. (supra), where also the appellant was carrying out the works related to plumbing, fixtures, tiling, doors, flooring, railing work, water proofing, etc. to the incomplete structures given by the main contractor. The Bench while considering the issue whether this work can be considered as "Original Works" observed that the appellant was given the shell of a building and was to carry out all the necessary activities to complete the building including the final finishing works and which cannot be said to be the finishing work only. 9. Considering the observations with reference to the nature of work carried out by the assessee, while agreeing with the same, we find that the nature of work in the present case involves not merely cosmetic finishing work but also includes extensive work in terms of making the building habitable. In todays' modern concepts, construction cannot be restricted to merely the brick work or the basic structure of a building. Any building whether residential/non-residential is made useable only after the a....