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TMI Blog2015 (2) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... at the fresh contract from 5.6.2007 is to be considered as a new contract, there cannot be any objection to classify the service rendered in this contract as a Works Contract Service, which was introduced w.e.f. 1.6.2007. The provider who opts to pay tax under the Rule shall exercise such option prior to payment of Service Tax. We find force in the appellant's contention that the fact that they had started paying tax under the Works Contract Composition Scheme is quite evident from the rate of tax reflected in the ST-3 returns. In any case, they had exercised option on 26.9.2007, the substantial benefit cannot be denied for procedural deficiency of delay in opting for Works Contract Service by a specific declaration under Rule 3. More so, when no format has been prescribed for making/exercising an option nor has it been specified as to whom the option must be addressed. Reliance is placed on the case of Bridge and Roof Company [2012 (6) TMI 491 - CESTAT, NEW DELHI] - Decided in favour of appellant. - Appeal No. ST/429/11 - Final Order No. A/209/2015-WZB/STB - Dated:- 7-1-2015 - Anil Choudhary And P. S. Pruthi,JJ. For the Appellant : Shri A.B. Naval, Cost Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before us. 3. Heard both sides. 4. The learned Counsel for the appellants forcefully stated that the earlier contract entered into by them with M/s City Centre Mall Pvt. Ltd. was terminated and the termination is valid in law in terms of the Indian Contract Act, 1872. After the introduction of Works Contract Service, they were legally entitled to classify their activity in this service being the more specific classification. They relied on the following decisions:- (i) Glaxo Smithkline Pharmaceuticals Ltd. Vs. Commissioner of Central Excise, Mumbai - 2006 (3) STR 711 (Tri-Mum). (ii) CCE, Ludhiana Vs. Lal Path Lab (P) Ltd. - 2007 (8) STR 337 (P H) (iii) Homa Engineering Works Vs. CCE - 2007 (7) STR 546 (Tri-Mum). (iv) BCCI Vs. CCE, Mumbai - 2007 (7) STR 384 (Tri-Mum) (v) Zee Telefilms Ltd. Vs. CCE - 2006 (4) STR 349 (Tri-Mum) 4.1 At the time of the first hearing which took place on 10.12.2014, the learned Counsel for the appellant agreed to produce documents to show that the termination of the earlier contract was perfectly valid in law and the new contract was awarded to them on competitive basis. Thereafter, on the second hearing on 7.1.2015, they p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service provider started paying Service Tax prior to 1.6.2007 in a particular category of Service Tax, such as Commercial or Industrial Construction Service', he is not entitled to change the classification of the service on or after 1.6.2007 for the same activity. Lastly, the learned AR stated that appellant had not exercised the option to avail Works Contract (Composition Scheme) as required under Rule 3 of the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007. 6. We have considered the submissions made by both sides. 6.1 The facts briefly quoted are that the appellant was executing the contract under the Commercial or Industrial Construction Service and constructing City Centre Mall for M/s City Centre Mall Pvt. Ltd., Nashik. Due to the dispute, the contract was terminated. Thereafter, M/s City Centre Mall Pvt. Ltd. invited new Bids, evaluated the bids and again awarded the contract to the appellant from 1.6.2007. The appellant again renewed the work of construction of City Centre Mall, but this time started paying Service Tax under the Works Contract Service, which was introduced from 1.6.2007 as Section 65(105)(zzzza). The appellant also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a new agreement was entered into by City Centre Mall with the appellant is also placed on record. The learned Counsel also showed the difference between the old contract and the new contract entered into with the appellant by M/s City Centre Mall Pvt. Ltd. We have seen the difference between the old contract and the new contract and find significant differences in Contract value, preamble to quantities clause (3), preamble to bill of quantities clause (18), Earnest money deposit, Retention money, Mobilization Advance, Recovery of Mobilization Advances, and Minimum billing amount. The comparison is shown below:- Sr.No. Point of Differences OLD Contract New Contract 1 Date of Contract 8 th December 2006 5 th June 2007 2 Period of contract 12 months From 24 th Dec 2006 to 23 rd Dec 2007 07 Months From 5 th June 2006 to 23 rd January 2008 3 Total Contract Value Rs.14,42,71,542/- Rs.9,87,53,659/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant in the form of Ledger abstract showing payment made to the appellant by M/s City Centre Mall Pvt. Ltd., Nashik. The Ledger abstract clearly indicated that the payments are differentiated as under the old contract and the new contract. Therefore, we arrive at the conclusion that the old contract was terminated w.e.f. 31.5.2007 and a fresh contract was executed w.e.f. 5.6.2007. Having stated that the fresh contract from 5.6.2007 is to be considered as a new contract, there cannot be any objection to classify the service rendered in this contract as a Works Contract Service, which was introduced w.e.f. 1.6.2007. 6.3 Having viewed that the appellant have executed the new contract w.e.f. 5.6.2007 and the activity is eligible to be classified as a Works Contract Service, we may now examine whether they are eligible for paying duty at the lower rate under the Works Contract (Compositon Scheme for payment of Service Tax) Rule, 2007. The objection of Revenue is that the appellant has not fulfilled the condition of Rules. For convenience, Rule 3 is extracted below:- The provider of taxable service who opts to pay service tax under these rules shall exercise such option in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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