Taxable services referred only to service contracts simpliciter and not to composite works contracts.

JUDGMENT

Vibhu Bakhru, J. The petitioner has filed the present petition, inter alia, praying as under:

"A) issue writ of certiorari/mandamus or an appropriate Writ or order or direction against the Respondent by quashing the impugned sub-clause (zzq) of clause (105) read with clause (25b) and sub-clause (zzzh) of clause (105) read with clause (30a) and (91a) of section 65 (as amended) or Chapter V of the Finance Act, 1994 at page no.9&11 of petition inasmuch as the levy of the service tax on the "works contract" per se as well as entry against Serial No.7, 7(a), 10 and 10(a) of Notification No.1/2006-ST, dated 01.03.2006 (as amended) at Page no.14 of Petition by declaring the same are ultra vires the Constitution of India and section 64, 66 and 67 of the Finance Act, 1994 and against the constitutional scheme of the legislation for levying service tax in India;

B) issue a Writ of certiorari/mandamus or any other appropriate Writ/order/direction for quashing the impugned Order-in-Original dated 30.11.20212 by the Respondent no.2 confirming demand of Rs.4,91,85,132/- with interest as well as levying penalties under Section 77 and 78 of the Finance Act, 1994;

C) issue a writ of certiorari/mandamus or any other appropriate Writ/order/direction declaring that the Parliament is not competent to levy service tax on works contract per se, hence, construction activity both commercial & residential using the materials (works contract) per se are not liable to service tax under the provisions of Chapter V of the Finance Act, 1994;"

2. The petitioner is engaged, inter alia, in the business of civil construction works. The petitioner entered into contracts for construction of various projects. The principal controversy involved in the present petition is whether the petitioner is liable to pay service tax, in addition to the tax paid by the petitioner, in respect of the said contracts.

3. The Adjudicating Authority had issued a show cause notice dated 07.04.2010 proposing a demand of a sum of Rs.4,91,85,132/- in respect of taxable services under Sub clauses (zzq) and (zzzh) of Section 65(105) of the Finance Act, 1994 (hereafter `the Act'). The said show cause notice was adjudicated by the concerned authority and by an order-in-original dated 30.11.2012 (which is impugned in the present petition), the Adjudicating Authority confirmed a demand of service tax of Rs.4,91,85,132/- along with interest and penalties after providing an exemption of 67% on account of the contracts being composite contracts.

4. The services relating to commercial and industrial construction were brought into the net of service tax, with effect from 10.09.2004, by introduction of Sub clause (zzq) under Sub-section (105) of Section 65 of the Act. The services relating to construction of complex were chargeable to service tax with effect from 16.06.2005, with the introduction of Sub clause (zzzh) of Section 65(105) of the Act.

5. The impugned order-in-original quantified the demand in respect of ten composite contracts. A tabular statement setting out the breakup of the demand raised in respect of the ten composite contracts as culled out from the impugned order-in-original dated 30.11.2012 is set out below: