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TMI Blog2022 (7) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from 1.6.2007 under the head works contract service and had classified them under the heads of commercial or industrial construction service and erection commissioning or installation service prior to this date and paid service tax. Even while paying service tax under these heads before 1.6.2007 the appellant had claimed abatement as available under various notifications. It has been settled by the Supreme Court in the case of Larsen Toubro that composite works contract services involving supply of goods/deemed supply of goods and rendering services are a separate species of contract known to commerce and must be treated as works contract services only. Such services become taxable under the head of works contract service under Section 65(105)(zzzza) of the Finance Act, 1994 with effect from 1.6.2007. Prior to this there was no charge of service tax on works contract services. Therefore, there was no levy of service tax on such composite services under any other head before 1.6.2007. Since it is undisputed that the appellant s contract involved provisions of services as well as supply/deemed supply of goods they can only be classified under the head works contract services as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave demanded and confirmed recovery of differential duty aggregating to Rs. 16.75 crores. Further penalties were imposed under Sections 75, 77 and 78 of Finance Act, 1994 are imposed upon the appellant. The details of the show cause notices are as follows: Sr. No. Show Cause Notice No. and date Period Involved Service Tax demanded Remarks 1. 15/Audit/2012-13 dated 20.04.2012 2006-07 to 2010-11 Rs.5,31,12,526/- SCN I 2. 688/2012-13 dated 20.12.2012 2011-12 Rs.1,21,28,612/- SCM 2 3. 833 dated 12.05.2014 2012-13 Rs.2,41,57,580/- SCN 3 4. 1140 dated 23.04.2015 2013-14 Rs.2,78,06,531/- SCN 4 5. 16/Div-X/2016-17 dated 05.05.2016 2014-15 Rs.1,09,08,289/-- SCN 5 Grand Total Rs.12,81,13,538/- 4. Learned Counsel for the appellant submits that the appellant provides "works contract service" by designing and constructing office interiors, customized exhibitions booths/stalls, television studios and retail fit outs. Its services include (a) lay out and designing of exhibition or interior space as per client's design and (b) fabricating and installing interior projects as per client's design. 5. The clients of the appellant are corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Representative reiterates the findings of the impugned order. He does not dispute the facts submitted by the learned Counsel with respect to the appellant's activities. 9. We have considered the submissions made by both sides. It is undisputed that the services provided by the appellant were on turnkey basis and a composite amount is charged by the appellant for its services and for the goods used in providing them. It is undisputed that the appellant treated this as works contract services and paid VAT to the respective State Governments as appropriate. The appellant had classified these services with effect from 1.6.2007 under the head "works contract service" and had classified them under the heads of "commercial or industrial construction service" and "erection commissioning or installation service" prior to this date and paid service tax. Even while paying service tax under these heads before 1.6.2007 the appellant had claimed abatement as available under various notifications. 10. It has been settled by the Supreme Court in the case of Larsen & Toubro that composite works contract services involving supply of goods/deemed supply of goods and rendering services are a sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subsequent discussion would show; and second, the Notification dated 17-5-2010 issued by the Government of Haryana, Excise and Taxation Department, whereby certain rules of the Haryana Value Added Tax Rules, 2003 have been amended and a table has been annexed providing for "Percentages for Works Contract and Job Works" under the heading "Labour, service and other like charges as percentage of total value of the contract" specifying 15% for fabrication and installation of elevators (lifts) and escalators, is self-contradictory, for once it is treated as a composite contract invoking labour and service, as a natural corollary, it would be works contract and not a contract for sale. To elaborate, the submission that the element of labour and service can be deducted from the total contract value without treating the composite contract as a works contract is absolutely fallacious. In fact, it is an innovative subterfuge. We are inclined to think so as it would be frustrating the constitutional provision and, accordingly, we unhesitatingly repel the same." (at para 60) 19. In Larsen & Toubro Ltd. v. State of Karnataka, (2014) 1 SCC 708 = 2014 (34) S.T.R. 481 (S.C.) = 2014 (303) E.L.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services. 44. We have been informed by counsel for the revenue that several exemption notifications have been granted qua service tax "levied" by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since the levy itself of service tax has been found to be non-existent, no question of any exemption would arise. With these observations, these appeals are disposed of. 45. We, therefore, allow all the appeals of the assessees before us and dismiss all the appeals of the revenue." (emphasis supplied) 11. Since it is undisputed that the appellant's contract involved provisions of services as well as supply/deemed supply of goods they can only be classified under the head "works contract services" as per the law laid down in Supreme Court in Larsen & Toubro. Such services could not have been charged with service tax under any other head either before or after 1.6.2007. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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