9911796707
TMI Blog2010 (6) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... within the purview of 'works contract' under the respective State enactments dealing with Sales Tax or Value Added Tax, as the case may be and further claims to be paying the taxes under the State Legislations on the material component, in accordance with the State Taxes Legislations including in Andhra Pradesh. 3 .The impugned circular issued by the Government of India, Ministry of Finance (the 1st respondent), to the extent of the clarification item, relevant and material for the purposes of the case (Reference Code No. 097.03, dated 04.01.2008), reads: " To Chief Commissioners of Central Excise (All) Chief Commissioners of Central Excise & Customs (All) Directors General (All) Commissioners of Service Tax (All) Commissioners of Central Excise (All) Commissioners of Central Excise & Customs (All) Sub: Amendment to Circular No. 96/7/2007-ST dated the 23rd August, 2007 - Clarification in respect of renting of immovable property service and works contract service - Regarding. In the circular No. 96/7/2007-ST dated the 23rd August, 2007: (i) after Reference Code 086.05/23.08.07, the following Reference Code and corresponding issue and clarification shall be insert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, commissioning or installation service, commercial or industrial construction service or construction of complex service, as the case may be, is not entitled to change the classification of the single composite service for the purpose of payment of service tax on or after 01.06.07 and hence, is not entitled to avail the Composition Scheme. 2. Trade and field formations may be informed accordingly. (G.G. Pai) Under Secretary (TRU)" 4. The petitioner is an assessee for service tax, on the rolls of the 2nd respondent. It obtained centralized sales tax registration for the several taxable services rendered by it under the category consulting engineering, construction service in respect of commercial or industrial buildings and civil structure, erection, commissioning and installation, construction of residential complexes, maintenance or repair services, site preparation and clearance and transport of goods by road. 5. The grievance of the petitioner is that in relation to the on going works being executed and in respect of which it had paid service tax prior to 01.06.2007, the petitioner is denied benefits under the composition scheme, under the Works Contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstallation" means any service provided by a commissioning and installation agency, in relation to,- (i) erection, commissioning or installation of plant machinery, equipment or structures whether pre-fabricated or otherwise; or (ii) installation of - (a) electrical and electronic devices, including wirings or fittings therefore; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar services; This definition with reference to the taxable service is dealt with by Clause (zzd). 11. The taxable services covered by Clause (zzq) (commercial or industrial construction services) is defined in sub-section [25(b)] which reads as under: (25b) "commercial or industrial construction service" means- (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; 14. Sec.65A of the Act enacts that the classification of taxable services shall be determined according to the terms of the sub-clauses of Clause (105) and that where for any reason a taxable service is, prima facie, classifiable under two or more sub-clauses of Clause (105), the classification shall be effected as follows: (a) the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description; (b) composite services consisting of a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised shall be applicable for the entire works contract and shall not be withdrawn until the completion of the said works contract. 18. The 2007 Rules were notified on 22.5.2007. As already noticed these Rules were issued by the Central Government in exercise of the powers conferred by Sections 93 and 94 of the Act. Sec.93 of the Act empowers the Central Government, if satisfied that it is necessary in the public interest, to exempt generally or subject to such conditions as may be specified in the notification, taxable service of any specified description from the whole or any part of the service tax leviable thereon. Under this provision the Central Government may also, if satisfied that it is necessary in the public interest, by a special order in each case, exempt any taxable service of any specified description from the payment of the whole or any part of service tax leviable thereon, under circumstances of exceptional nature to be stated in such order. 19. Sec.94 of the Act empowers the Central Government to make rules for carrying out the provisions of Chapter-V including [sub-clause (i)] any other matter which by this Chapter is to be or may be prescribed. Sec. 65(86) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case on hand the challenge is confined to the impugned circular issued by the 1st respondent. The provisions of Rule 3(3) of the 2007 Rules are not challenged. 24. On the analysis above and in our considered view the impugned circular (to the extent it is challenged i.e., in relation to reference code 097.03 dated 04.01.2008) is wholly in conformity with the provisions of Rules 3(3) of the 2007 Rules. The fact that the nature of the works executed by the petitioner which hitherto fell within the ambit of the taxable services enumerated in Clauses (zzd), (zzq) and (zzzh), now fall within services classified as a works contract in Clause (zzzza), does not in our considered view have any bearing on the entitlement of the petitioner to the benefits of the composition scheme under the 2007 Rules and in the facts and circumstances of this case. The benefit of the composition scheme under the 2007 Rules is available [subject to the exercise of option and the conditions of eligibility for exercise of such option as spelt out in Rule 3(3)] only in relation to "works contract service", as defined in Rule 2(c) as meaning service provided in relation to execution of the works contract re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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