2019 (7) TMI 212 - AT - Service Tax

Works Contract Service - Composition Scheme - obtaining of permission from the jurisdictional Officer for discharging the service tax liability under the composition scheme - mandatory requirement or not - HELD THAT - The said issue is settled in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI where it was held that The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service - For the period after 1.6.2007, service tax liability under category of commercial or industrial construction service‟ under Section 65(105)(zzzh) ibid, Construction of Complex Service‟ under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter. Appeal dismissed - decided against appellant.

Summary

Issues:
- Benefit of composition scheme under Works Contract Service for discharging service tax liability.

Analysis:
The case involved the appellant, registered under "Works Contract Service," who had executed works for Public Sector Undertakings and subcontracted some works without including the subcontract amounts for discharging service tax liability. The original authority confirmed the demand, interest, and penalties but granted the benefit of composition scheme to the assessee. The Department filed an appeal challenging the extension of the composition scheme benefit. The Department argued that the assessee did not exercise the option for paying service tax under the composition scheme, a mandatory requirement. Despite the absence of the assessee during the hearing, the Tribunal considered the issue. Referring to the decision in Real Value Promoters vs. CCE Chennai, the Tribunal held that the order passed by the Commissioner (Appeals) did not require interference. The Tribunal dismissed the appeal, affirming the extension of the composition scheme benefit to the assessee for discharging the service tax liability.

In conclusion, the Tribunal upheld the decision to grant the benefit of the composition scheme to the assessee for discharging the service tax liability under Works Contract Service. The Tribunal emphasized the mandatory requirement for the assessee to exercise the option and obtain permission from the jurisdictional Officer for paying service tax under the composition scheme. The Tribunal's decision was influenced by the precedent set in Real Value Promoters vs. CCE Chennai, indicating that the order passed by the Commissioner (Appeals) was in accordance with the law. The dismissal of the appeal signified the Tribunal's affirmation of the extended benefit of the composition scheme to the assessee, highlighting the importance of compliance with procedural requirements in such cases.