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TMI Blog2018 (11) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of services‟ simpliciter. Demand set aside - appeal allowed - decided in favor of appellant. - Appeal No.: ST/00263/2012 - Final Order No.: 42640/2018 - Dated:- 8-10-2018 - Shri Madhu Mohan Damodhar, Member (Technical) And Shri P. Dinesha, Member (Judicial) Shri. M. N. Bharathi, Advocate for the Appellant Shri. A. Cletus, ADC (AR) for the Respondent ORDER Per P. Dinesha : The appellants are holders of Central Excise Registration with effect from 06.08.2007 for Residential Complex Service as defined in Section 65(91a) of the Finance Act, 1994. They are providing service relating to the Construction of Residential Complexes. A Show Cause Notice dated 23.04.2010 was issued proposing to classify their service under Residential Complex Service as against Works Contract Service and thereby proposing to demand ₹ 33,84,984/- along with interest for the period from March 2007 to March 2009. The appellants had paid an amount of ₹ 21,55,499/- as advance to be adjusted against the liability during the subsequent period. After due process of law, the adjudicating authority vide Order-in-Original dated 31.01.2011 confirmed the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth material supply as well as value services. Another ground for demand is that the appellants have not exercised their option for payment of service tax under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. In any case, the show cause notices implicitly agree that the work performed by the appellant is in the nature of composite works contract only. Based on the Hon ble Apex Court judgment in Larsen Toubro, such composite works contract then will not be liable to service tax levy prior to 1.6.2007. On the same ratio, such composite contracts even for the period after 1.6.2007 disputed in these appeals will still have to be held as composite works contract only and not pure service simpliciter contracts that could be classified under commercial or industrial construction service, or construction of complex service. To put in another way, to merit being classified as CICS or CCS, the service provider concerned will be rendering only service simpliciter without any other element in them namely without any material or goods supply involved. That is definitely not the case in the facts of these appeals. The activities of the appellants will therefore cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity 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 Section 65A of the Finance Act, 1994, it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 brining 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 itself, the entire demand con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 deman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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