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TMI Blog2024 (12) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... contract, the assessee is entitled to avail benefit of abatement of 67% under the Notification No. 1/2006-ST dated 01.03.2006. The gross amount charged for rendering composite service/WCS has been wrongly taken for calculating service tax liability and that the impugned services are wrongly alleged as that of Maintenance, Management and Repair Service. Hon ble Apex court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT ] had held that when the activities undertaken under various contracts involved providing of services along with providing the material for the same, the services are not simpliciter services but are the composite services called as Works Contract Service . The Hon ble Apex Court had also held that the Works Contract Services got identified in statute with effect from 1.6.2007 hence any contract for rendering the composite services cannot be levied to tax prior to 1.6.2007. The activity of the appellant rendered to AAI should be classified as Works Contract Service with effect from 1.6.2007. For the period i.e. from March 2006 to May 2007, the activity still cannot be called as Maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No other evidence has been produced by the department to prove any other positive act of the appellant resulting into alleged suppression nor any evidence is produced to prove the mala fide act of the appellant committed or omitted with an intent to evade payment of service tax. With these observations, the extended period of limitation has wrongly been invoked by the department. The demand for the period 2006-07 to 2011-12 has wrongly been raised vide the show cause notices - the show cause notice is held barred by limitation. Both the appeals have wrongly confirmed the demand. The order under challenge dated 18.06.2013 is accordingly, hereby set aside - Appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Present for the Appellant : Shri A.K. Batra, Chartered Accountant Present for the Respondent : Shri Rajeev Kapoor, Authorized Representative ORDER The present order disposes of two appeals, the appellant being same and the order in original being common and issue also being same except for two different periods. The details of both the appeals are: Appeal No. Show Cause Notice No. Order-in-Original No. Period ST/59894/2013 370- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccountant and Shri Rajeev Kapoor, learned Authorized Representative for Revenue. 5. Learned counsel for the appellant has mentioned that the appellant is a contractor providing services in relation to construction, renovation, repair, maintenance, completion and finishing etc. of the buildings or the civil structures. The appellant is the registered contractor of AAI and during most of the period in dispute, the appellant had been executing contracts entered with AAI. The other authority to whom the services have been provided during the impugned period is Central Public Works Department (CPWD) i.e. a non commercial Government body. The appellant is also registered with the VAT department. Foremost the show cause notice is alleged as vague where the demand has been proposed under WCS and MMR without providing quantum of demand under each category of services. The adjudicating authority have erred in confirming the demand under MMR even for the composite contracts which are otherwise classifiable under WCS. Hence the demand is liable to be set aside on these grounds only. It is submitted that there is no denial to the fact that services of repair and maintenance of building have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal is prayed to be dismissed. 7. Having heard both the parties at length perusing the entire record, we observe and hold as follows: 8. The entire period in dispute is prior negative list era i.e. for the entire period, the classification of service was the relevant criteria. Seen from that observation, the controversy to be adjudicated in the present case is : (1) Whether the services rendered by the appellant to AAI amounts to rendering Works Contract Services or amounts to Management, Maintenance or Repair Service ? (2) Whether the show cause notice is barred by time? Issue No. 1 9. To adjudicate the issue foremost we need to look into the definition of both the services. Section 65(105)(zzzza) defines the taxable Work Contract Service (WCS), it says : Any services provided or to be provided to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Explanation . For the purposes of this sub-clause, works Contract means a contract wherein, - (i) Transfer of property in goods involved in the execution of such contract is leviable to tax as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. The composite contracts involving transfer of property in goods are the works contract where value of goods is not chargeable to service tax. Further, under Section 67 of Finance Act, 1994, 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 contract, such as are contained on the facts of the present cases. 11. It is also noticed that no attempt to remove the non-service elements from the composite works contract has been made by deducting from the gross value received, the value of property in goods which got transferred in the execution of a works contract. In fact, Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Maintenance, Management and Repair but were the composite services involving service element as well as the element of sale of goods. As already discussed Service Tax can be charged only on the service element. The value of goods if defined clearly has to be deducted from the total value. Since in present case, it is indivisible composite contract, the assessee is entitled to avail benefit of abatement of 67% under the Notification No. 1/2006-ST dated 01.03.2006. We hold that gross amount charged for rendering composite service/WCS has been wrongly taken for calculating service tax liability and that the impugned services are wrongly alleged as that of Maintenance, Management and Repair Service. 13. We observe that the Hon ble Apex court in the case of Commissioner Vs. Larsen Toubro - 2015 (39) STR 913 (SC) had held that when the activities undertaken under various contracts involved providing of services along with providing the material for the same, the services are not simpliciter services but are the composite services called as Works Contract Service . The Hon ble Apex Court had also held that the Works Contract Services got identified in statute with effect from 1.6.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 65(3c) of Finance Act, 1994 which reads as under: (3c) airport has the meaning assigned to it in clause (b) of section 2 of the Airports Authority of India Act, 1994: Section 2(b) of the Airports Authority of India Act, 1994 defines the term airport , as under: 2. In this Act, unless the context otherwise requires,- (b) airport means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of Section 2 of the Aircraft Act, 1934; Meaning of aerodrome in clause (2) of section 2 of Aircraft Act, 1934: aerodrome means any definite or limited ground or water area intended to be used, either wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds, vessels, piers and other structure thereon or appertaining thereto; 18. These definitions makes it clear that any area assessable for landing and taking off area for aircrafts for runways, for maintenance of aircrafts, for facilities of passengers and for aerodrum all are defined as airport. Resultantly R.G. Bhawan as well as Safdarjung is held to be covered under Airport . The Works Contract Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside. Issue No. 2 21. As apparent from the show cause notice, the department has alleged that since the appellant has filed Nil ST-3 returns despite the service tax liability and has wrongly declared the services in those returns the said act amounts to Suppression of Facts . But from the discussion arrived at Issue No. 1 above it is clear that the appellant has rightly classified the service rendered by them as works contract service with effect from 1.6.2007 and commercial and industrial construction service for the prior period i.e. from March 2006 to May 2007. We hold that there is no mis-representation in their returns vis- -vis the nature of services. 22. The findings under the said issue have also held that the appellant is not liable to pay service tax as confirmed against him, for the services being provided to airport and non commercial governmental authority hence there is no willful, misstatement when Nil return has been filed by the appellant. No other evidence has been produced by the department to prove any other positive act of the appellant resulting into alleged suppression nor any evidence is produced to prove the mala fide act of the appellant committed or omit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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