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TMI Blog2017 (12) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... med under works contract service with applicable rate under composition scheme. For the period prior to 01.06.2007, the appellants were held liable for service tax under erection commissioning or installation, commercial or industrial construction service and construction of complex service. The service tax was calculated on the gross value based on the available records. The original authority also imposed penalties under various sections of Finance Act, 1994. 2. The ld Counsel appearing for the appellant submitted that the original order dated 30.08.2013 considered income figures from Profit and Loss Account plus amount of advances from balance-sheets. For the year 2011-12, estimated taxable value has been taken in place of actual accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rate cannot be varied thereafter. In other words, the composition rate of 2 % prevailing at the date of commencement of contract should remand valid for the entire contract and cannot be varied mid-way. The appellants have also contested the application of Section 73A in the present case. They have not received any service tax from the client which they have not paid to the Government. The price being of inclusive of tax does not mean they have collected service tax. On all these grounds, the ld Counsel submitted that the impugned orders are not sustainable both on facts and on law. 4. The ld AR reiterated the finding of the lower authority. He submitted that all through-out the proceedings, the appellants did not come forward with full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited - 2015 (39) STR 913 SC, no service tax liability arises in respect of such composite works contracts for the period prior to 01.06.2007. We also note that when the contracts are determined to be works contracts, then the question of taxing such contracts to the full gross value is not legally tenable. The applicability of abatement or composition scheme for such contracts should be examined with supporting evidence. In the present case, the lower authority has allowed the composition scheme for the appellant in respect of works contract service post 01.06.2007. Here, a further dispute arose with reference to rate of duty applicable for such composition in respect of the same contract spread-over many years. The rate of duty for compos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantification. The tax liability of composite works contract is to be determined in line with the decision of Hon'ble Supreme Court in Larsen & Toubro Limited (supra). The tax liability on such contract will arise only with effect from 01.06.2007. The quantification on taxable value should be based on the actual receipts of consideration by the appellant. There can be no levy of service tax on composite works contract for the period prior to 01.06.2007. 8. The above discussion clearly indicates that the impugned orders cannot be sustained in the present form. Accordingly, these orders are set-aside and the matter is remanded back to the original authority for a combined decision of all the notices which were considered and decided in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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