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TMI Blog2024 (3) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... when the appellant/assessee did not pay any tax on such works contract service and starts paying tax after availing concession, such payment of tax under the scheme should be construed as exercising the option. The Calcutta High Court in M/S. LARSEN TOUBRO LIMITED VERSUS ASSISTANT COMMISSIONER, SERVICE TAX COMMISSIONERATE, DIVISION-III, KOLKATA OTHERS [ 2022 (12) TMI 523 - CALCUTTA HIGH COURT] also examined the issue and observed that In the absence of statutory format can the department be heard to say that the option should be exercised in a particular fashion and cannot be by conduct, that is by paying the service tax equivalent to 2% of the gross amount charged for the works contract. In view of the aforesaid decisions of the Tribunal and judgment of the Calcutta High Court, it has to be held that payment of service tax contemplated under the Composition Scheme and filing the return would be sufficient compliance of exercising the option under the Composition Scheme. The impugned order dated 29.03.2017 passed by the Commissioner, therefore, cannot be sustained and is set aside - appeal allowed. - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Jatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended period of limitation was correctly invoked. 5. Shri Jatin Majan, learned counsel appearing for the appellant submitted that as the appellant had deposited service tax at the rate of 4.12 percent in accordance of the Composition Scheme and submitted the returns, it should be treated that the appellant had complied with rule 3(3) of the Composition Scheme. Learned counsel also pointed out that there is no requirement of separately filing any intimation in writing to the department for payment of service tax under the Composition Scheme. In support of this contention, learned counsel placed reliance upon a decision of the Calcutta High Court in Larsen Toubro Ltd. vs. Assistant Commissioner, Service Tax Commissionerate, Division-III, Kolkata [(2023) 2 Centax 327 (Cal.)] and decisions of the Tribunal in ABL Infrastructure Pvt. Ltd. vs. Commissioner of C. Ex., Nashik [2015 (38) S.T.R. 1185 (Tri. Mumbai)] and CCE, Jaipur-I vs. Zuberi Engineering Company [Service Tax Appeal No. 34 of 2012 and Service Tax Appeal No. 129 of 2012 decided on 08.11.2017]. 6. Learned authorised representative appearing for the department, however, supported the impugned order and placed reliance upon the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, we find favour in the appellant s contention that the restriction under Rule 3(3) of the said rules is for availing credit in respect of input and not input service. We have also seen Board s Circular and the judgment of Nagarjuna Construction (supra) relied upon by Revenue. The facts there are different because there the situations were that a single and same contract was in existence before 1-6-2007 and after 1-6-2007. In the present case, we have held above that the appellant was executing work in a new contract from 5-6-2007 and was therefore eligible under the category of Works Contract Service. We, therefore, set aside the demands of Service Tax. (emphasis supplied) 11. Subsequently, a Division Bench of the Tribunal in Zuberi Engineering Company, after referring to the decisions of the Tribunal in ABL Infrastructure and Nagarjuna Construction Company, observed as follows: 6. For the tax liability post 01/06/2007 under works contract service, we note that the eligibility of the appellant/assessee to pay tax after availing the composition scheme is under dispute. The appellant/assessee supports the finding of the Original Authority. The Revenue is contesting the concession o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirety to ascertain the true meaning and intention of the legislation. If that be so sub-rule (3) of Rule 3 of the scheme cannot be read in isolation. It is required to be read in conjunction with sub-rule (1) of Rule 3. 11. Sub-rule (1) of Rule 3 is substantive portion of the rule which provides for an option to be exercised by the person liable to pay service tax . By virtue of the said rule, the person liable to pay service tax has an option to discharge the liability by paying the amount equivalent to 2% of the gross amount charged for the works contract instead of paying service tax at the rate specified in Section 66 of the Act. On a reading of sub-rule (1) of Rule 3 shows that the option exercisable by this person liable to pay service tax is exercised by paying service tax at the 2% instead of rates specified in Section 66 . Sub-rule (3) of Rule 3 states that the provider of the taxable service who opts to pay service tax under the composition scheme shall exercise such option prior to the payment of service tax. If Rule 3(1) and (3) and read in conjunction and harmoniously, the intention of the scheme is to give an option to the provider of taxable service to discharge hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the decision of the Hon ble Supreme Court in Nagarjuna Constructions Company Limited v. Government of India [2012 (28) S.T.R. 561 (S.C.)] for the proposition that the appellant having failed to exercise the option prior to the payment of tax is not entitled to the benefit of the composition scheme at 2%. On this aspect, we have already interpreted Rule 3(1) and (3) of the composition scheme and given our reasons as to how there has been compliance of the rule and in the absence of any statutory form for exercise of option, the filing of the return, mentioning the relevant notification number and payment of tax at the compounded rate is sufficient compliance of exercise of option under the scheme. That apart, we note the facts in Nagarjuna Constructions to be entirely different. Since the appellant therein had already paid the taxes and did not opt to pay the service tax under the composition scheme but later sought for such a benefit which was negatived. Therefore, the said decision is inapplicable to the facts and circumstances of the case on hand. (emphasis supplied) 15. The decisions of the Tribunal and the Supreme Court in Nagarjuna Construction which have been rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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