Case Law Details
National Building Construction Corporation Limited Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata)
The issue at the heart of this case is whether the construction contract in question, undertaken by M/s. Raitani Engineering Works Pvt. Ltd., falls under the category of ‘Works Contract Service’ or ‘Commercial or Industrial Construction Services’ for tax purposes. The crux of the decision revolves around the classification of these contracts under Section 65(105)(zzd).
The appellant argued that as the contract also involved the supply of goods, it should be classified under ‘Works Contract Service’, a category not proposed in the Show Cause Notice (SCN). They also contended that since the project was for public welfare and not commercial purpose, it should not be considered as ‘Commercial or Industrial Construction’.
Citing precedents from the Supreme Court and Tribunal cases, the judgment underscored that composite contracts involving goods and services should be taxed only as ‘Works Contract Service’. Additionally, it highlighted that the entry under Section 65(105)(zzd) is meant for construction simpliciter, ruling out any scope for vivisection to isolate the service component of the contract.
This case underscores the principle that contracts involving both goods and services should fall under the ‘Works Contract Service’, further asserting that Section 65(105)(zzd) applies only to simple construction services, and not composite ones.
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