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TMI Blog2019 (2) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... t was of the view that the appellant is not eligible for abatement as per Notification No'7/2006 since they have availed Cenvat credit on input services. After due process of law, the original authority confirmed the demand along with interest and imposed penalties. Hence this appear. 2. on behalf of the appellant, learned counsel Shri V.s. Manoj submitted that the period prior to 01 .06.2007 cannot be subject to levy of service tax for the reason that the activities of the appellant are in the nature of composite contract, which involves both supply of materials as well as service element. The demand has been made after 01.06.2007 under Construction of Residential Complex Service and the same cannot sustain as per the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract prior to its introduction from 1-6.2007 which was finally settled by the Hon'ble Apex Court in the case of Commissioner of Central Excise Vs" Larsen & Toubro Ltd. reported in 2015 (39) STR 390 (SC)" The Hon'ble Apex Court held that the taxable services of 'consulting engineer' under section 65(105)(g) of the Finance Act; erection, 'commission and installation services' under section 65(105)(zzd) of the said Act; 'technical testing and analysis' under section 65(105)(zzh) ibid; 'construction services' under section 65(105)(zzq); construction of complex services under section 65(105)(zzzh) would refer only to service contracts simpliciter and not to composite works contracts; that these five tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks 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 classifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax will be levied at only 2 per cent of the total value of the words contract". The issue was analysed by the Hon'ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65(705)(zzzza) i.e" Works Contract Services. As pointed out by the ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2OO7. Therefore only those contracts which were service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of the activity more specifically and" therefore, as per the provisions of Section 654 of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date. " Thus, for example, while construction of a new residential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(1O5)(zzzza) Explanation (c).For both these categories for the definition of residential complex, the definition given in section 65(105)(91a) will have to be adopted as discussed above will have to be taken into account" ... ... ... In the light of the discussions, findings and concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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