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TMI Blog2009 (10) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... The Appellants are engaged in the construction of industrial or commercial buildings of structures. In the ST-3 Return filed for the half year period Ending 30-9-2007, the appellants had declared the taxable value of Rs. 1,48,65,524/- under Commercial construction and Rs. 5,47,24,467/- under Works Contract Service . In the ST-3 Return filed for the half year ending 31-3-2008, they declared the taxable value as NIL under commercial or Industrial construction and Rs. 1,35,14,556/- under Works Contract service . On verification, it was seen that the appellants had classified the taxable service rendered under contracts entered prior to 1-6-2007 under Commercial or Industrial Service and paid tax accordingly for the part of the payment received prior to l-6-2007 and in respect of the part of the contract work executed after 1-6-2007, even though the contract for the service was a single composite one, they had revised the classification to the Works Contract Service from the earlier one for the amount received on or after 1-6-2007 and paid the service tax under the Composition Scheme. This revision of classification has been held as contrary to law by the lower authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prospective buyer on completion of residential unit, while the undivided share in land is first registered in favour of the buyer with whom the construction agreement is entered into for construction of residential unit. The AAR has held that in the former case it is liable under Section 65(105)(zzzh) of the Act as Construction of complex service while in the later case, it is held to be liable to service tax, under Section 65(105)(zzzza) of the Act as work contract service . The above principle can be applied in classification of service to resolve any difference between the commercial construction service and work contract service. The above interpretation is factually incorrect. In the above case law, the Authority on Advance Ruling nowhere states that, in one case the classification would be under 65(105)(zzzh) and; in other case, it would be under 65(105)(zzzza). The operative portion of the order is as below : 24. We have already expressed the view that the service in question can be appropriately classified under sub-clause (zzzh). That classification will stand irrespective of the fact whether the service could also brought within the ambit of sub-clause (zzza) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above clarification, the issue relates to revision of classification in respect of part amount received after 1-6-2007, after having paid service tax for part of the payment received under the respective taxable service and the issue does not relate to change in classification in respect of unfinished part of the contract executed prior to 1-6-2007 as in the present case. In fact, on a perusal of the case records, it is seen that the appellants, vide their letter dated 5-6-2008, had intimated to the Department that, for the payments received from their clients against value of work done upto 31-5-2007, they had classified the projects under commercial or Industrial construction service and, in the case of same projects continued after 1-6-2007, for the payments received against value of work done on or after 1-6-2007, they had classified the projects under Works Contract Service . This statement of the appellants has not been denied by the lower authority/Department. Hence it could be said that the appellants have fulfilled the clarification issued in the above circular as long as they have paid service tax in respect of the payments received from their clients against the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with the statutory provisions existing during the material point of time. (Emphasis supplied) In the above circular of the Board (highlighted portion), it has been abundantly made clear that the newly specified services may contain part or whole of existing individually specified taxable service viewed from this clarification, it could be seen that the newly specified Works Contract Service , the definition of which has been quoted in verbatim above, contains such services as (i) Erection, commissioning or installation, (ii) commercial or Industrial construction and (iii) construction of complex services which already stand specified respectively under Sub-clauses (zzd), (zzq),and (zzzh) of Clause (105) of Section 65 of the Finance Act 1994. It is also pertinent to note that though these three services have been incorporated in the Works Contract Service , they have not been withdrawn from Section 65(105) of the Finance Act, 1994 and they continue to remain as separate services under their respective entries viz., (zzd), (zzq) and (zzzh) of section 65(105) the Finance Act 1994. In the above circular, the Board amply makes it clear that the classification of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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