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TMI Blog2014 (5) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... y recall that the Commissioner in his order dated 29.10.10, raised both the issues. First issue pertains to appropriate classification of the service provided by the assessee. Second issue pertains to the availability of the benefit of paying at concessional rate after 1.6.2007 under the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 on the ongoing projects of the assessee. The latter question framed has thus a direct bearing on the issue of availability of composition of tax. However, as noted above, the Tribunal having remanded the proceedings for fresh consideration, we do not see any question of law arising. All contentions, including that looking to the contents of the show cause notice it is not open to deny such benefits, are kept open to be raised before the Commissioner - Decided against assessee. - Tax Appeal No.385 of 2014, Civil Application No.256 of 2014, Tax Appeal No.385 of 2014, Tax Appeal No.386 of 2014, Civil Application No.257 of 2014, Tax Appeal No.386 of 2014 - - - Dated:- 24-4-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Appellant : Mr. Prakash Shah Dhaval Shah, Advs. JUDGMENT (Per : Honourable Mr. Justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that M/s.JMC is liable to pay the Service Tax under the category of Construction of Residential Complex / Construction Service - Commercial or Industrial and they are not eligible to get the abatement scheme. Xxxx xxxx It also appears that the value of the aforesaid taxable service rendered, charged and recovered have escaped from assessment and levy of service tax by reason of wrong availment of benefit of notification No.32/2007-ST dated 22.5.2007 on the part of M/s.JMC. Penalty for failure to collect and pay the services tax as per section 76 and a penalty for suppressing the value of taxable service under section 78 of the said Act also appear to be imposable on M/s.JMC for the reasons recorded hereinabove. On the basis of such allegations, the Commissioner asked the assessee to show cause in following manner: In light of the facts discussed in foregoing paras, it appears that the M/s.JMC have short paid service tax. Therefore, the Service Tax short paid by them is recoverable from them under Section 73 of the Finance Act, 1994. Further, interest on delayed payment of service tax as per section75 also appears chargeable and recoverable from them. They are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which clarifies that once the provider of taxable service opts to pay service tax under these rules, he shall exercise such option prior to payment of service tax in respect of such works contract and option so exercised shall not be allowed to be withdrawn till completion of the works contract. 3.5 I find from the language of the said rule that the intention of legislature is very clear that those running on ongoing work contracts where payment of service tax had already started prior to 1.6.2007, under any taxable service, the service tax liability will continue to be discharged at normal rate under section 66 read with section 67 of the Finance Act, 1994 and benefit of Work Contract (Composition scheme of payment of Service Tax) Rules, 2007 will not be available. 3.6 I find that in the case before me, it is not disputed that in all the 9 ongoing projects, payment of service tax had begun prior to 1.6.2007. This being the fact of the matter, the case is now an open and shut case. All such 9 ongoing projects by virtue of the fact that service tax payment began prior to 1.6.2007 have disqualified themselves for being eligible to be taxed under Work Contract (Composition sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice which were statements showing the details of service tax short paid and recoverable under Works Contract Service for the period from 1.6.2007 to 31.7.2008 on the non-availability of benefit of concessional rate under notification No.32/2007 dated 22.5.2007. An addendum was issued on 14.12.09 to the said show cause notice replacing para 6.7 of the original show cause notice and increasing the service tax demand to Rs.20.53 crores (rounded off). The Commissioner passed two separate orders in connection with two show cause notices. It is however, not necessary to refer to both orders. The assessee carried the issue in appeal before the Tribunal. The Tribunal by a common judgment which is impugned in these appeals, substantially agreed with the appellant. The Tribunal reversed the findings of the Commissioner that the assessee was not entitled to revise the classification to work contract service after 1.6.2007. In fact, in the original show cause notice, the demand was made on the basis that the assessee is providing works contract services from 1.6.2007. The Tribunal held that it was open for the assessee to switch over to such classification which was also clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .20,53,91.309 on Commercial or Industrial Construction Services / Construction of Complex Services and denying the benefit of Notification No.1/2006-ST dated 01.3.2006 is totally a new and different ground than what was being taken in the original show cause notice dated 22.10.2008, where classification of the service provided was not doubted at all. The judgments relied upon by the Revenue that the changes proposed were only mathematical corrections or facts available at the time of issue of show cause notice dated 22.10.2008, are thus not applicable to the facts of the present proceedings. The Addendum dated 29.09.2009 and its further corrigendum dated 17.05.2010, therefore, falls as the same has changed the entire basis of the first show cause notice dated 22.10.2008. Having said that it is further observed that Addendum dated 14.12.2009 has not been issued in suppression of the first show cause notice dated 22.10.2008, therefore the first show cause notice dated 22.10.2008 and its corrigendum dated 29.09.2009 survive. 6.2 The issue of admissibility of composition scheme for ongoing Works Contracts as on 01.6.2007 has since been decided by Hon ble Apex Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the Board s circular dated 24.8.2010, certain issues pertaining to change of classification after 1.6.2007 came up consideration. In this context, it was clarified as under: It has been brought to the notice of the Board that the following confusions/disputes prevail with respect to long term works contracts which were entered into prior to 01.06.2007 (when the taxable service, namely, Works contract came into effect) and were continued beyond that date: (i) While prior to the said date services like Construction, Erection, commissioning or installation, Repair services were classifiable under respective taxable services even if they were in the nature of works contract, whether the classification of these activities would undergo a change? (ii) Whether in such cases of continuing contracts, the Works Contracts (Composition Scheme for payment of Service Tax) Rules, 2007 under Notification No.32/2007ST dated 22/05/2007 would be applicable? 2. The matter has been examined. As regards the classification, with effect from 01.06.2007 when the new service Works Contract service was made effective, classification of aforesaid services would undergo a change in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fails, benefit of composite tax could or could not be denied. The same would depend on very minute reading of the show cause notice and in one of the cases, the addendum issued by the department. We may recall that the Commissioner in his order dated 29.10.10, raised both the issues. First issue pertains to appropriate classification of the service provided by the assessee. Second issue pertains to the availability of the benefit of paying at concessional rate after 1.6.2007 under the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 on the ongoing projects of the assessee. The latter question framed has thus a direct bearing on the issue of availability of composition of tax. However, as noted above, the Tribunal having remanded the proceedings for fresh consideration, we do not see any question of law arising. All contentions, including that looking to the contents of the show cause notice it is not open to deny such benefits, are kept open to be raised before the Commissioner. Subject to the above observations, Tax Appeals are dismissed. In view of the order passed in Tax Appeals, Civil Applications do not survive. Disposed of accordingly. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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