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TMI Blog2018 (12) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012 - Final Order No. 43038-43039/2018 - Dated:- 3-12-2018 - Shri Madhu Mohan Damodhar, Member (Technical) And Shri P. Dinesha, Member (Judicial) Ms. Radhika Chandra Sekhar, Advocate for the Appellant Shri. B. Balamurugan, AC (AR) for the Respondent ORDER Per P. Dinesha : These appeals have been filed by the assessee against the common Order-in-Original Nos. 16 17/2012 dated 29.03.2012 passed by the Commissioner of Central Excise Service Tax, Chennai and the dispute pertains to the demand of service tax under Construction of Residential Complex Service and Commercial Construction Service for the period March 2006 to June 2010. 2.1 Brief facts are that the appellant is engaged in development of Residential and Commercial Projects who entered into join agreement with land owners for construction of flats, the nature of contract being a composite one involving supply and transfer of property in goods during the execution of the same. 2.2 Two Show Cause Notices dated 24.03.2010 and 22.10.2010 were issued by the Department proposing to demand service tax of ₹ 3,22,42,643/- for the period March 2006 to June 2009 and ₹ 61,37,445/- fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Bench, after considering the decisions of various judicial fora, has ruled as under: 7.7 In the present appeal also, there is no dispute that the construction activities are in the nature of composite works contract. The appellants being involved in the construction of the same projects prior to and after 1.6.2007, for example, even in the show cause notice dated 20.10.2009 (relating to Appeal No. ST/723/2010), taxable value has been calculated at 33% of gross amount received which is an implicit admission that that activity involved both 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax under CICS / CCS / RCS prior to 1.6.2007 and after. Our view is supported by the fact that the method / scheme for discharging service tax on the service portion of composite contract was introduced only in 2007. 7.11 The ld. AR Shri A. Cletus has tried to counter this contention by stating 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 repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity. b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai - 2018-TIOL-360-CESTAT-MUM, in respect of identical issue for the period from 2005 to 2012, the Tribunal in para 7 has held as under:- 7. On careful consideration of the submissions made by both the sides, we find that the issue falls for consideration is whether the services rendered by the appellant 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction contracts executed prior to 1st June, 2007. 11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviability of tax for rendering works contract service . On the contrary, the submission of the appellant that they had been providing works contract service had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines 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 extinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of Complex Service under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services simpliciter. c. For activities of construction of new building or civil structure or new residential complex etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under Works Contract Service as defined under section 65(105)(zzzza) ibid. d. The show cause notices in all these cases prior to 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under Commercial or Industrial Construction Service or Construction of Complex Service, cannot therefore sustain. In respect of any contract which is a composite contract, service tax cannot be demanded under CICS / CCS for the periods also after 1.6.2007 for the periods in dispute in these appeals. For this very reason, the proceedings in all these appeals cannot sustain. 7.2 From the above observations we are convinced that the issue being identical, the above ruling squarely applies to the case on hand. Further, no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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