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TMI Blog2022 (1) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... te works contract . The Supreme Court noticed that a works contract is different from a contract for service simpliciter and that it is only w.e.f 01.06.2007 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 01.06.2007. It is, therefore, clear from the aforesaid judgment of the Supreme Court in Larsen Toubro that a composite works contract cannot be taxed under construction services under section 65(30a) or under commercial or industrial construction service under section 65(25b) of the Finance Act, prior to 01.06.2007 as the scope is limited to cover contract of service simplicitor only - Even post 01.06.2007 service tax could not have been confirmed under works contract service. The show cause notice alleged that the appellant was providing construction services or commerical or industrial construction service and the demand has also been confirmed under this category by the adjudicating authority. The impugned order, therefore, deserves to be set aside for post 01.06.2007 period also since the demand made under a particular category of service found to be incorrect in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the appellant made the following submissions: (i) The services rendered by the appellant were 'works contract' service and leviable to tax after 01.06.2007 under section 65(105)(zzzza) of the Finance Act. Thus, they could not be subjected to levy of service tax prior to 01.06.2007. In support of the contention, learned counsel placed reliance upon the judgment of the Supreme Court in Commissioner of Central Excise & Customs, Kerala vs. Larsen & Toubro Ltd.[ 2015 (39) STR 913 (SC)]; (ii) Service tax is not leviable even for the period post 01.06.2007 and so the same is also liable to be set aside. The contention is that once it is held to be a 'works contract' prior to 01.06.2007, the demand under the category of 'construction service' or 'commercial or industrial construction service' would not survive for the reason that the demand was not made under the category of 'works contract'; and (iii) The extended period of limitation could not have been invoked and interest and penalty could not be imposed. 6. Shri C. Mallikarjun Reddy, learned authorized representative appearing for the Department has, however, supported the impugned order and contended that it do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'works contract' services after introduction of a charge on a 'works contract' service and not under any other head. This is what was observed by the Supreme Court in Larsen & Toubro. The Supreme Court examined as to whether 'works contract' service can be classified under section 65(105)(zzzh) as 'construction of complex' service 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 a "works contract" is different from a contract for service simpliciter and that it is only w.e.f 01.06.2007 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 01.06.2007. The relevant portion of the judgment is reproduced below : "15. A reading of this judgment, on which counsel for the assessees heavily relied, would go to show that the separation of the value of goods contained in the execution of a works contract will have to be determined by working from the value of the entire works contract and deducting therefrom charges towards labour and services. Such deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. ******* 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines "taxable service" as "any service provided". All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service element ..... X X X X Extracts X X X X X X X X Extracts X X X X
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