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TMI Blog2022 (12) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... d were not sufficient for levying Service Tax on indivisible composite works contracts. Exemption notifications for impugned services were immaterial, and had to be disregarded, since levy itself of Service Tax was non-existent, no question of any exemption would arise. Hence, we are of the opinion that the question of demanding service tax on such contracts does not at all arises. These findings are sufficient for us to hold that the entire demand for the period prior to July 2007 is liable to be set aside. For the period post July 2007, works contracts could be changed only under Works Contract Service [Section 65 (105) (zzzza)] and there is no demand under this head at all. Therefore, the demand for this period also cannot be confirmed. Extended period of limitation - HELD THAT:- The demands also need to be set aside for the reason that the revenue has failed to produce any evidence to prove a positive act on the part of the appellant to have an intent to evade the payment of tax. The appellant rather is a government undertaking being managed by the Government Officers itself, there can be no intent to evade its own revenue. The extended period is therefore held to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant was also found engaged in providing services to the noncommercial concerns which were not taxable. The department further observed that the conditions of Notification No. 15/2004- S.T. dated 10.09.2004 as amended by Notification No. 19/2005- S.T. dated 07.06.2005 and Notification No. 01/2006-S.T. dated 01.03.2006 were not complied with. Hence, the abatement permissible under the said notification in respect of commercial or industrial construction services which were composite in nature was not available to the appellant. 1.2 Accordingly, vide Show Cause Notice No. 531 dated 23.04.2010, service tax amounting to Rs.22,09,97,113/- was proposed to be recovered from the appellant under the head Construction Services [Section 65 (105) (zzq)] upto 16.06.2005 and under the head Commercial and Industrial Construction Services [Section 65 (105) (zzzh)] after this date along with the interest and the penalties under Section 70, 76, 77 and 78 of the Finance Act, 1994. 1.3 The proposal was partly confirmed vide Order-in-Original No. 37/2011 dated 16.08.2011 and the demand of Rs.1,48,89,011/- was confirmed to be recovered from the appellant along with the interest. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the nature of the services involved herein, which are purely in the form of work contracts which have been made taxable w.e.f. 1st July, 2007. 3.2 Above all the entire demand is alleged to have been time barred. The findings of adjudicating authority below are alleged to be contradictory as at one point of time in para 46 of adjudication order, the appellant s case is held fit for waiver of penalty in terms of Section 80 of the Act. However, in subsequent findings appellant is alleged to have suppressed the material facts. It is submitted that appellant is a State Government Undertaking, there is no question of any benefit out of evasion of service tax. Above all appellant had already deposited Rs.30,30,872/- voluntarily, there appears no question of alleged fraud or suppression. The extended period has thus been wrongly invoked by the adjudicating authority below. With these submissions learned Counsel has prayed for the order under challenge to be set aside and his appeal to be allowed. Department s appeal is objected as there is no case of remand. 4. To rebut these submissions learned DR has submitted that adjudicating authority has meticulously examined the work contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices used or to be used for non-commerce/governmental purposes and as such are not taxable. From the above admissions, the another apparent fact is that the said construction services actually have been provided by the sub-contractor of the appellant. The Larger Bench of this Tribunal in the case of Commissioner of Service Tax, New Delhi Vs. Melange Developers Private Limited reported as 2020 (33) G.S.T.L. 116 (Tri-LB) has held that the liability of sub-contractor is independent of the liability of the main contractor. 7. The above admissions also make it clear that the services in question were actually the work contracts as stands under Section 65 (105)(zzzza) of Service Tax Act. Hon ble Apex Court in the case of Commissioner of Central Excise, Kerala Vs. Larsen and toubro Ltd. [2015 (39) STR 913 (SC)], it was held that: there was no charging section specifically, prior 01.07.2007, for levying service tax only on works contracts, and measure of tax with service element derived from gross amount charged for works contract less value of property in goods transferred in execution of works contract. Section 65(105)(g), 65 (105)(zzd), 65(105)(zzh), 65(105)(zzq) and 65(105)(zzzh) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if they were services simpliciter. However, the services in question are alleged to involve both supply of goods and services and hence cannot be changed under CICS at any rate. 10. As a result of above discussion, the entire demand is held to have wrongly been confirmed. Once the very basis of confirmation of demand goes, the question of legality of enhancement and question of competence to enhance thereof without affording opportunity of hearing to the appellant becomes redundant. Similarly the question of invoking Section 80 waiving off the penalties of Section 70, 76 and 77 of the Finance Act, 1994, becomes redundant. No purpose left anymore for remanding the matter. 11. For determining the query raised in department s appeal, we observe that department itself is of the opinion that converting the non-taxable services to taxable ones and then enhancing the quantum of demand cannot be called as error apparent on record. The change is admitted to not to be the one which is covered under Section 74 of the Finance Act, 1994. Otherwise also the basic principle of natural justice is enshrined under Latin phrase Audi Alteram Partem means one shall not be condemned unheard. Enh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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