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2019 (5) TMI 717 - AT - Service TaxValuation - Construction of Residential Complex Services - benefit of abatement - period involved is 2005-06 to 2009-10 - HELD THAT - The Supreme Court in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT examined as to whether Works Contract Service can be classified under Section 65(105)(zzzh) and held that the scope of Section 65(105) (zzzh) is limited to cover contract of service simplicitor only and not a composite works contract. The Supreme Court noticed that it is only w.e.f 01 June, 2007 that Section 65(105)(zzzza) was introduced to cover composite works contract and so works contract cannot be covered under any other category of services prior to 01 June, 2007. Composite Works Contract cannot be taxed under CCS under Section 65(105) (zzzh) as the scope is limited to cover contract of service simplicitor only. The position that comes out very clearly, therefore, is that even prior to 01 June, 2007 and post 01 June, 2007, the nature of service rendered by the Appellant was WCS and not CCS. The show cause notice alleged that the Appellant was providing CCS service and the demand has also been confirmed under this category by the adjudicating authority. The impugned order, therefore, deserves to be set aside for this reason alone since the demand made under a particular category of service found to be incorrect in a subsequent proceeding, cannot be sustained. Demand set aside - appeal allowed - decided in favor of appellant.
Issues:
1. Quashing of the order passed by the Commissioner (Appeals) dated 28 February, 2013. 2. Determination of Service Tax liability under 'Construction of Residential Complex Services'. 3. Classification of the nature of service rendered as 'Works Contract Service' (WCS). 4. Interpretation of relevant provisions of the Finance Act, 1994. 5. Applicability of the judgment in Larsen & Toubro regarding Works Contract Service. 6. Consideration of the period involved in the appeal (2005-06 to 2009-10). 7. Analysis of the Supreme Court judgment in Hindustan Polymers Company and Reckitt & Colman of India. 8. Reference to the decision of the Mumbai Tribunal in Ashish Ramesh Dasarwar vs Commissioner of Central Excise & Service Tax, Nagpur. Detailed Analysis: 1. The appeal sought to quash the order passed by the Commissioner (Appeals) on 28 February, 2013, challenging the earlier order by the Deputy Commissioner of Central Excise dated 23 June, 2011. 2. A show cause notice was issued to the Appellant for Service Tax recovery under 'Construction of Residential Complex Services' with interest and penalties under relevant sections of the Finance Act, 1994. 3. The Appellant argued that the nature of service provided constituted 'Works Contract Service' based on a composite service involving the supply of materials, as per the Supreme Court judgment in Larsen & Toubro. 4. The Department's Authorized Representative supported the Appellate Order, contending no interference was necessary. 5. The submissions by both parties were duly considered by the Tribunal. 6. The period under consideration for the appeal was from 2005-06 to 2009-10, focusing on the category of Construction of Residential Complex Services. 7. Detailed examination of the definitions and provisions of the Finance Act, 1994, particularly Sections 65(30a), 65(105)(zzzh), and 65(105)(zzzza) related to taxable services and works contracts. 8. The Larsen & Toubro judgment clarified that Works Contract Service cannot be classified under Construction of Complex Services, emphasizing the distinction between service contracts and composite works contracts. 9. The Tribunal concluded that the Appellant's activities constituted Works Contract Service, not Construction of Complex Services, both pre and post the introduction of relevant provisions. 10. Citing legal precedents, including judgments in Hindustan Polymers Company and Reckitt & Colman of India, the Tribunal emphasized the importance of aligning demands with the actual nature of services provided. 11. Referring to the Mumbai Tribunal decision in Ashish Ramesh Dasarwar case, it was highlighted that demands made under incorrect service categories cannot be sustained. 12. Consequently, the impugned order dated 28 February, 2013, was set aside, and the appeal was allowed, based on the misclassification of the service provided by the Appellant.
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