NDLI: Cc and Ce and St, Noida Vs. M/s Interarch Building Products Pvt. Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	66 Finance Act 1994 – ss. 64 65(105)(zzzza) 67 and 73 65(105)(zzq)
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Finance Act, 1994 (32 of 1994)
Case(s) Referred	Referred Case 0 Referred Case 1
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Finance Act, 1994 – ss. 64,65(105)(zzq),65(105)(zzzza),66,67 and 73 – Service (Determination of Value) Rules, 2006 – Rule2A – CENVAT Credit Rules, 2004 – Payment of service tax – Liabilityfor – Respondent–assessee was engaged in the business ofmanufacture, supply and erection at the site of prefabricated steelbuildings – They paid service tax under the category “commercialor industrial constructions services” as referred u/s.65(105)(zzq)of the Finance Act, 1994 – Respondent availed CENVAT credit andshort paid the Service Tax in cash – Revenue was of the view thatthe service rendered by the respondent was classifiable under “workscontract service”(chargeable under sub clause(zzzza) of s.65(105)and it was mandatory for the respondent to either follow Rule 2A ofService Tax (Determination of Value) Rules, 2006 or adoptComposition Scheme – Tribunal held that there was no question onapplicability of Rule 2A nor there was any question of forciblyapplying the option of composition scheme and respondent wasentitled to CENVAT credit on inputs – Before the Supreme Court,the case on behalf of the respondent-assessee was that Rule 2A andeven in the composition scheme the words used are subject to theprovisions of s.67 the assessee had an option to pay the service taxon the entire contract value and that the Rule 2A is not compulsoryand the composition scheme is optional – Whether an assessee whois liable to pay service tax under works contract service has thelegal right not to follow Rule 2A nor the composition Scheme on theground that in terms of s. 67 of the Act of 1994 an assessee isentitled to take the total contract value which includes both goodsand services and remit service tax on the entire value as workscontract service and in the process also entitled to avail the CENVATCredit – Held: Services rendered by the respondent can be said tobe ‘works contract service’ as per the Finance Act, 1994 w.e.f.01.06.2007 as per s.64(54) r/w. s. 65(105)(zzzza) – In the case of ‘works contract service’ an assessee is liable to pay the service taxon the service element and the sales tax on the element of goodstransferred pursuant to the contract – The submission of therespondent made cannot be accepted as it would make Rule 2A andcomposition scheme otiose – As per the scheme of the Act thedetermination of value of service portion in the execution of theworks contract is to be made as per Rule 2A, however with an optionto the assessee to avail the benefit of composition scheme – Eitherthe assessee has to go for composition scheme or go fordetermination of value as per Rule 2A and the assessee has to payservice tax on service element and can claim CENVAT credit on thesaid amount only – Therefore, the respondent has to pay the servicetax on the value of services as per Rule 2A of the (Determination ofValue) Rules, 2006 and thereafter to avail the CENVAT Creditaccordingly – The impugned judgment and order passed by theCESTAT is quashed and set aside.
Judge	Hon'ble Mr. Justice M.R. Shah
Neutral Citation	2023 INSC 476
Petitioner	Cc And Ce And St, Noida
Respondent	M/s Interarch Building Products Pvt. Ltd.
SCR	[2023] 7 S.C.R. 977
Judgement Date	2023-04-02
Case Number	11330

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