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TMI Blog2019 (5) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the Appellant requiring it to explain why Service Tax to the extent of Rs. 2,64,468/- should not be recovered from it with interest under section 73(1) and 75 of the Finance Act, 1994 (hereinafter referred to as the 'Act') and why penalty should also not be imposed under sections 76, 77 and 78 of the Act. The show cause notice mentions that the assessee was engaged in providing 'Construction of Residential Complex Services' (hereinafter referred to as 'CRC Service' under section 65(105)(zzzh) read with section 65(30a) of the Act. The Service Tax liability was calculated in the show cause notice after giving the benefit of abatement envisaged under the Notification dated 01 March, 2006. The Adjudicating Authority confirmed the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes "Construction of Complex" to mean : "65(30a) - Construction of Complex means - (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex." 8. Section 65(105) deals with "Taxable Service" and in relation to 'Construction of Complex', Section 65(105)(zzzh) is reproduced below : "65(105)(zzzh) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;" 10. The Supreme Court in Larsen & Toubro examined as to whether Works Contract Service can be classified under Section 65(105)(zzzh) and held that the scope of Section 65(105) (zzzh) is limited to cover contract of service simplicitor only and not a composite works contract. The Supreme Court noticed that it is only w.e.f 01 June, 2007 that Section 65(105)(zzzza) was introduced to cover composite works contract and so works contract cannot be covered under any other category of services prior to 01 June, 2007. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to account the eight heads of deduction, the charge to tax that would be made would otherwise contain, apart from other things, the entire cost of establishment, other expenses, and profit earned by the contractor and would transgress into forbidden territory namely into such portion of such cost, expenses and profit as would be attributable in the works contract to the transfer of property in goods in such contract. This being the case, we feel that the learned counsel for the assessees are on firm ground when they state that the service tax charging section itself must lay down with specificity that the levy of service tax can only be on works contracts, and the measure of tax can only be on that portion of works contracts which contain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract." 11. It is, therefore, clear from the aforesaid judgment of the Supreme Court in Larsen & Toubro that a Composite Works Contract cannot be taxed under CCS under Section 65(105) (zzzh) as the scope is limited to cover contract of service simplicitor only. 12. What is also important to note is that the definition of CCS in Section 65(105)(zzzh) remained the same even after 01 June, 2007 when WCS was introduced. In the absence of any change in the definition of CCS, the judgment of the Supreme Court in Larsen & Toubro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the basis that there was a process of manufacture of coloured polystyrene from uncoloured polystyrene. Having come to a conclusion against the Revenue on these counts, the appropriate order for the Tribunal to have passed was to have set aside the demand and left it open to the Revenue to proceed against the appellants, as permissible under the law. The appellants would then have had the opportunity of meeting the precise case made out by the Revenue." 15. This is what was also observed by the Supreme Court in Reckitt & Colman of India in paragraph 3 of the judgment which is reproduced below : "3. It will be remembered that the case of the Revenue, which the appellant had been required to meet at every stage from the show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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