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TMI Blog2024 (8) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order, has carefully considered the three contracts and has relied on CBEC Circular No. 138/07/2011 dated 06.05.2011 to hold that services received by Works Contract Service providers from their sub-contractors are classifiable under respective sub-clauses of Section 65(105) of the Finance Act, 1994 - the Commissioner was correct in holding that the services provided by the appellant was correctly classifiable under Works Contract Service. In order to extend the benefit of any exemption from service tax, it is essential that copies of the agreements are examined in totality. Further, it is found that it is a fact that even though DDA was created by the Parliament in exercise of the powers conferred under Article 53(3)(b) of the Constitution, it is still a juristic entity separate from the State and does not fall within the scope of a Central/State Government or Local Authority - without the requisite details/information regarding the projects completed by the respondent, the conclusion arrived at by the adjudicating authority is open to debate. Therefore, it would be appropriate to remand the matter giving an opportunity to the respondent to satisfy that the work undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant had paid the service tax @2.06% against the applicable rate of 4.12%. During 2011-12 and 2012-13, the respondent had paid service tax @4.12% whereas, service tax w.e.f. 1.7.2012 @4.94% was payable on the said services. 4. Thereafter, Show Cause Notice dated 23.04.2014 was adjudicated, vide the impugned order, which held that the nature of activities undertaken by the respondent is of executing composite contracts for development of civil structure. The Commissioner held that the execution of the composite contract by the respondent for development of civil structure therein would fall within the scope of Works Contract as held by the Supreme Court in Larsen Toubro v. State of Karnataka (SCC 708), with the exception of one contract. Thus, the services rendered by the respondent are covered under Works Contract Services prior to 01.07.2012 under section 65(105) of the Act and w.e.f. 01.07.2012 under Section 65B (54) read with Section 66E of the Finance Act, 1994. The Adjudicating Authority has further observed that the respondent had executed some of their contracts for Delhi Development Authority and rendered services of construction of boundary wall at CWG village along with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Common Wealth Game Village has several zones, such as residential, international, training, dining and operational which consist of commercial as well as general public utility. The Common Wealth Game Village residential zone was developed by M/s Emaar MGF Construction Private Limited which consisted of 14 blocks, 34 residential towers and 1168 Air-conditioned flats. M/s Emaar MGF Construction Private Limited were given some share of luxury apartments for developing. The apartments/flats build in Commonwealth Game Village had been sold at market prices with first such public auction being held by DDA in 2012, thus confirming the commercial nature of the property. Thus, the Adjudicating Authority gravely erred in concluding that the activities carried out by DDA are not covered under Commercial or Industrial activities and are not covered under Explanation of sub clause of section 65(105) of Finance Act,1994. Post 01.07.2012, similarly, Adjudicating Authority has erred in extending the benefit of exemption under Clause 12(a) of the Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 to the Respondent w.e.f. 01.07.2012, on the ground that DDA is a Government Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction commissioning (EPC) projects; 7. We find that for the period prior to 01.07.2012, it is settled law that any agreement which involved supply of materials as per specifications with provision of material and labour would qualify as composite and indivisible Works Contract, prior and post 01.06.2007. However, in the instant case, the impugned order has observed that the appellant had been awarded the following four contracts which the Department was aware. The details are given below : s. No. Agreement No. Name of the work Tendered Value Payments received 1. 03/EE/CGD/DDA/A 2008-09 dated: 12.1.2009 Construction of CWG village for CWG-2010- SH-Construction of Boundary Wall 19726850 30288493 2. SWD-4/5{563}/DDA/ 2008-09/1872-05/11/09 Providing executing additional work RCC lift wall, wardrobe, pop and finishing 21500665 21279552 3. F5{585}/SW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mple, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. 23. It is, therefore, clear from the aforesaid judgment of the Supreme Court in Larsen Toubro that a Composite Works Contract cannot be taxed under CCS under Section 65(105) (zzzh) as the scope is limited to cover contract of service simplicitor only. 7.2 In view of the above discussions we hold that the Commissioner was correct in holding that the services provided by the appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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