Composite contract of supply of goods and services is rightly classifiable under ‘Works Contract Services’

Nirmal Engineers & Contractors Vs Commissioner (Appeals-I) (CESTAT Delhi)

CESTAT Delhi held that work orders include the charge supply of goods and fixing and finishing of tiles/granite/marbles such composite contracts involving both supply of goods and services are rightly classifiable under ‘work contract services’.

Facts- During the course of audit, it was observed that the appellant had rendered various construction activities to L&T which would be classifiable as ‘commercial or industrial construction’ and ‘works contract services’.

A show cause notice dated 23.10.2012 was issued to the appellant proposing service tax demand of Rs. 16,72,645/- with interest u/s. 75 and penalties under sections 76, 77 & 78 of the Finance Act. The show cause notice also invoked the provisions of section 72 of the Finance Act while proposing the said demand. The Additional Commissioner confirmed the service tax demand amounting to Rs. 16,72,645/- with interest and penalties.

Commissioner (A) dismissed the appeal. Being aggrieved, the present appeal is filed.

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