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TMI Blog2024 (5) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts like the extent of supply portion or the service portion, which according to us is like attempting to vivisect/dissect the understanding of the parties to the contract, which is not permissible. This has been held so by the Apex court in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India [ 2006 (3) TMI 1 - SUPREME COURT] . Looked from this perspective, we are of the view that since the period involved in this appeal is from October 2006 to September 2011 which is prior to 01.07.2012 which is the date of insertion of explanation to Section 65B, the composite contracts involved in the present appeal were not amenable to service tax, as per the law laid down by the Apex court in the case of CCE Vs. Larsen Toubro Ltd.[ 2015 (8) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees of the assessee company were recorded and consequently, a show cause notice dated 23.04.2012 was issued proposing to demand service tax for the period October 2006 to September 2011 by extending the period of limitation within the meaning of Section 73 (1) of the Finance Act, 1994, along with applicable interest under Section 75 ibid, and of penalty under Sections 76, 77 and 78 ibid. 3. It appears from the record that the assessee /appellant filed its detailed reply to the above show cause notice issued to it, thereby explaining the scope of various contracts and the role of the appellant and there- in. It appears from paragraph 3.0 of the Order in Original that the appellant claimed that the scope of contract included supply of go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion that the contracts in question were not a pure labour contract. 6. The original authority refers to the scope of contracts at para 7.5, mentioned as the contract profile wherein he has opined that contracts M2, M4 and M5 were mainly for erection of pipelines, handling, transporting, pre-fabricating, welding and testing. 7. With regard to the other contract E1, which was for erection, commissioning of all electrical system equipments and supply of electrical equipment, only 25% of the contract was held to be composite in nature, while 75% was for Service. Thereafter, reference is made to Notification No. 1/2006 and it was observed by the authority that as per the said Notification, erection, commissioning or installation agency could a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of arguments. 10. After hearing the rival contentions, we find that the only issue that arises for our consideration is, whether the contracts entered into were in the nature of works contracts, and if so, whether they are divisible in nature? 11. Impugned order reveals that all the work orders/contracts involved supply of materials, though it has been concluded therein that the same was very much to a lesser extent. 12. Works contract service was brought within the tax net w.e.f. 01.06.2007 with the insertion of Section 65 (105) (zzzza) to the Finance Act, 1994. The statute does not qualify the liability to tax or otherwise, on any conditions, in the case of composite contracts like the extent of supply portion or the service po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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