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TMI Blog2023 (10) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... troduction of Works Contracts Service (WCS) w.e.f. 1.6.2007, the definition takes into account, the element of including the value of goods that have gone into the composite contract. The Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] had analyzed the very same issue and held that the demand under WCS in the nature of composite contract (construction of residential complex service, commercial or industrial construction service, erection, commissioning and installation service) cannot sustain when it involves composite contracts which includes both supply of goods / materials as well as rendering of services. The demand under Commercial or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied by the customer. All other materials required for construction was procured by the appellant. The nature of the works executed by the appellant is not service simplicitor and is composite in nature involving both supply of materials and rendering of services. Therefore the demand of service tax under CICS cannot sustain as decided by the Tribunal in the case of M/s.Real Value Promoters Pvt. Ltd. Vs CGST & Central Excise, Chennai -2018-TIOL-2867-CESTAT-MAD. 3. Without prejudice to the above submission, it is submitted by the counsel that the demand of service tax under CICS has been raised on the gross amount without extending the benefit of 67% abatement under Notification No.1/2006-ST dt. 1.3.2006 alleging that the value of all m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the demand has been correctly confirmed and prayed that the appeal may be dismissed. 5. The main issue that arises for consideration is whether the demand of service tax raised under 'Commercial or Industrial Construction Services' is sustainable or not. The definition of the said service under Section 65 (105) (zzza) reads as under : "(a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services 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 servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , erection, commissioning and installation service) cannot sustain when it involves composite contracts which includes both supply of goods / materials as well as rendering of services. 9. The Tribunal in the case of Real Value Promoters Pvt. Ltd. (supra) had considered the issue as to whether even after 1.6.2007, the levy under CICS or CRC etc. is sustainable when the works executed are composite in nature. The relevant part of the order reads as under : "7.10 The issue was analyzed 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are in the nature of services"simpliciter. c. For activities of construction of new building or civil structure or new residential complex etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under „Works Contract Service"as defined under section 65(105)(zzzza) ibid. d. The show cause notices in all these cases prior to 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under „Commercial or Industrial Construction Service"or „ Construction of Complex"Service, cannot therefore sustain. In respect of any contract which is a composite contract, servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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