No infirmity in paying service tax under works contract

M/s. ABL Infrastructure Pvt. Ltd vs. CCE [2015-TIOL-360-CESTAT-MUM360-CESTAT-MUM]

No infirmity in paying service tax under works contract (Composition Scheme) when a new contract was entered into on 05/06/2007 and the contract for construction was terminated on 31/05/2007.

 

FACTS:

Appellants were executing the contract of Commercial or Industrial Construction Service. Due to dispute, the contract was terminated and thereafter fresh bids were evaluated and the contract was again awarded to the Appellants and a new contract was executed with effect from 05/06/2007. Various documents viz. tender documents; affidavits regarding the entire sequence of events were placed on record to establish that the work was executed under the new contract.

 

HELD:

On verification of the documents, the Tribunal held that it is apparent that two contracts are different in factual details and thus it was concluded that a fresh contract was executed with effect from 05/06/2007 and thus there is no objection to classify the service rendered in this contract as Works Contract Service. It was also held that the Appellants are eligible for the composition rate in the returns filed is enough indication and sufficient compliance with Rule 3(3) of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007.