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TMI Blog2017 (9) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... complete supply of required materials and carrying out the installation of materials, testing and commissioning. For these services provided by them, respondents were getting installation charges in addition to cost of materials supplied. Department took the view that the activity is liable to service tax under the category of "Erection, Commissioning and Installation Services" [ECIS]. Accordingly, proceedings were initiated, inter alia, proposing demand of service tax liability under "ECIS" for the period 01.07.2003 to 31.03.2006 along with interest liability thereon to imposition of penalties under various provisions. 2. The original authority vide Order dated 31.03.2008 confirmed these proposals including imposition of equal penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponse, learned authorized representative submits that the judgment rendered by Hon'ble Apex Court was only in respect of indivisible contract and for Works Contract simplicitor, which is not the case here since the details of labour charges involved are available. 5. Heard both sides. From the facts narrated in the Order dated 31.03.2008 of the original authority itself, it clearly emerges that even the department has considered the activity carried out by the respondents as being in the nature of "Works Contract". Para 5 of the said order, which is reproduced below will exemplify this finding: "Vide letter Reference SME/CEX/2005-2006/841, dated 23.03.2006, the assessee furnished copies of contract with various agencies, copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. 25. In fact, by way of contrast, Section 67 post amendment (by the Finance Act, 2006) for the first time prescribes, in cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax. 27. In fact, the speech made by the Hon'ble Finance Minister in moving the Bill to tax Composite Indivisible Works Contracts specifically stated :- "State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to levy service tax on services involved in the execution of a works contract. However, I also propose an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the works contract." 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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