Order date – 19 September 2022

Facts – 

• The Respondent, M/s Shaka Electricals, registered with the Central Excise department for rendering services of erection, commissioning and installation services taxable under section 65 (105) (zzd) of the Finance Act, 1994.
• On perusal of the ST-3 returns filed by the respondent, it was noticed by the officers that prior to obtaining registration the respondent was providing services such as, fabrication supply and erection of various electric poles providing street lighting, etc. during the period 2009-2010 to 2010-2011 which appeared to be classifiable under ECIS.
• The respondent contested the show cause notice on the ground that the services provided by it were composite work contracts involving both supply of goods and rendering services and, therefore, no service tax was chargeable, under ECIS.
• The commissioner held that the composite works contract are a separate species of contracts known to trade and cannot be charged to service tax under any other head. He, therefore, dropped the entire proceedings.
• Aggrieved, the Revenue filed an appeal.

Issue – 

• Whether the respondent is liable to pay service tax on the services in dispute?

Order – 

• The Tribunal observed that wherever there is a composite contract it is a works contract service. Such services can be classified only under the head of “works contract” service w.e.f. 01.07.2012 under section 65 (105) (zzzza) and were not taxable prior to this date as per the judgment of Supreme Court in Commissioner of Central Excise & Customs, Kerala versus Larsen & Toubro Ltd.
• Since the entire period in this case was prior to 01.07.2012, the services rendered by the respondent were not taxable.
• Also, works contracts cannot be treated as services simplicitor which are classifiable under various sub-clauses of clause 105 of section 65.
• The Tribunal observed that the submission of the Revenue that the respondent had obtained registration under ECIS and, therefore, respondent had obtained registration under ECIS and, therefore, the services in dispute must be considered under this head only cannot also be accepted. Registration by the assessee does not conclusively determine the nature of the service rendered.
• The Tribunal accepted the observation of the commissioner and held that respondent was not liable to pay service tax on the services in dispute and the impugned order was upheld.
• Appeal dismissed.