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TMI Blog2018 (10) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the department - the demand of service tax cannot sustain - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... n. After 1.6.2007, appellant has discharged the service tax under works contract services under the composition scheme. He relied upon the decision of the Tribunal in the case of Real Value Promoters Pvt. Ltd. and Ors. Commissioner of GST and Central Excise, Chennai Vide Final Order Nos. 42436 to 42438/2018 dated 18.9.2018 to argue that the demand of service tax under construction of residential complex service cannot sustain after 1.6.2007 for the disputed period (May 2006 to March 2008). 2.1 The dispute in respect of Swarup Heritage is only on the land owner's share of UDS, while the demand for service tax in respect of Jayant on eligibility for composition scheme post 1.6.2007 on both builder's share and owner's share. The demand is captured in the following table: Project Service Tax Liability (INR) Owner's Share Builder's Share Swarup Heritage 28,17,866 - Jayant Tech Park 2,27,65,233 2,10,00,697 Total 2,55,83,099 2,10,00,697 4,65,83,796 2.2 In respect of Swarup Heritage also, the very same argument was put forward by the ld. counsel for the appellant who submitted that the demand cannot sustain for the reason that the department has demanded the service tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting that works contract service is service / activity which would be of a general nature whereas the construction activities defined in Commercial or Industrial Construction Services, Construction of Complex Service and Construction of Residential Complex etc. are of special nature. He took support of the maxim 'generalia specialibus non derogant' - 'general things do not derogate special things'. The counsel for appellants have submitted that as per Section 65A of the Act ibid, classification of service shall be based on the specific entries and the more specific description of service has to be preferred. He invited our attention to CBEC's Circular 128/10/2010 dated 24.8.2010 which is reproduced as under:- "The matter has been examined. As regards the classification, with effect from 1-6-2007 when the new service 'Works Contract service' was made effective, classification of aforesaid services would undergo a change in case of long term contracts even though part of the service was classified under the respective taxable service prior to 1-6-2007. This is because 'works contract' describes the nature of the activity more specifically and, therefore, as per the provisions of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of 52 contracts entered with various Govt. authorities need to be taxed under MMRC/CICS/ECIS or otherwise. It is on record and undisputed that the adjudicating authority has specifically held that all the 52 contracts which has been executed by the appellants are with material. Learned Counsel was correct in bringing to our notice that the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact that the contracts were executed with material. It is also on record that the Revenue has not contested these findings of the adjudicating authority before the Tribunal. If that be so, even when the Revenue authorities are accepting the facts that the contracts executed by the appellant are nothing but works contracts, for the period in question, entire case of the Revenue in the show-cause notice stands demolished by the Apex Court in the case of Larsen & Toubro Ltd. (supra). In the said judgment, their Lordships have very categorically laid down the law that the works contract cannot be vivisected for the confirmation of demand under various other services. On this ground it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fines of the show cause notices do not permit confirmation of demand of tax on any service other than 'commercial or industrial construction service'. It is already established in the aforesaid judgment of the Hon'ble Supreme Court that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the contract." d. In the case of Logos Construction Pvt. Ltd. Vs. Commissioner of Central Excise as reported in 2018 (6) TMI 1361, the Tribunal has held as under:- "5.1 The payment upto 01.06.2007 will get extinguished on account of the law that has been laid down by the Apex Court in the case of Larsen & Toubro Ltd., (supra), relied upon by the Ld. Counsel. So ordered. 5.2 The Ld. Counsel has been at pains to point out that on-going projects which were only in the nature of works contract prior to 01.04.2007 cannot be brought under different category of Construction Services and CICS subsequently. We find merit in his arguments. The SCN has proposed demand of service tax liability only under these two categories and not under Works Contract service. The demand confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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