Justice G. Raghuram, President - The issues referred for our consideration essentially involve an issue of classification of taxable services i.e., whether components of a composite transaction amounting to supply of labour/rendition of service(s), under a works contract ought to be classified only under Section 65(105)(zzzza) of the Finance Act, 1994 (the Act) - inserted by the Finance Act, 2007, w.e.f 01-06-2007, or are also comprehended within the ambit of existing (as on 01-06-2007) taxable services such as Commercial or Industrial Construction Service (CICS); Construction of Complex Service(COCS); or Erection, Commissioning or Installation Service (ECIS).

2. Integral to our charter is the interpretation of relevant provisions of the Act. CICS; COCS & ECIS are distinct, extant services defined and enumerated to be taxable services, prior to introduction of Works Contract Service (WCS).

CICS was initially introduced w.e.f 10-09-2004, termed construction service; was amended in 2005, now called CICS amplifying the scope of the service as well and is defined in Section 65(25b) r/w Section 65(105)(zzq). COCS was also introduced in 2005, defined in Sections 65(30a) & 65(91a) r/w Section 65(105)(zzzh). ECIS was enacted to be a taxable service w.e.f 01-07-2003 qua Section 65(105)(zzd) and is defined in Section 65(39a). Definitions and scope of some of these services were amended over time. The evolutionary history of CICS, COCS & ECIS is however not relevant to the scope of our analyses. The legislative/statutory setting, the relevant definitions, the charging and valuation provisions in respect of these services as on 01-06-2007 (the date on which WCS was inserted), would suffice for answering the reference. We extract relevant provisions of the Act, later in the judgment.

3. We have heard learned Senior Advocate Shri N. Venkataraman, for Larsen & Toubro Ltd. (L&T), an assessee/appellant; learned Advocates Shri P.K. Sahu, Shri. Puneet Agarwal and Shri B.L. Narasimhan representing other assessees whose appeals are either listed on our board or are pending before the CESTAT; and Shri Amresh Jain and Shri Govind Dixit learned A.R's representing Revenue. We have also heard Shri J. K. Mittal who asserted to be representing the local Bar association. On 10-11-2007, at commencement of the hearing, Shri Mittal objected to our hearing the reference, contending that the order of reference itself (dated. 09-09-2013) was incompetent and as a consequence, the special Bench coram non judice. We orally and peremptorily rejected this contention, particularly as invitation for intervention to non-appellants was to assist in answering the reference and did not extend to contesting the correctness of the reference. Revenue had already challenged and unsuccessfully the order dated 09-09-2013 and its further litigative campaign before the Hon'ble Delhi High Court failed. Shri Mittal however did not turn up later, to address us on merits of the reference.

Now to the meat of the matter;

4. Prefatory observations:

The legislative fields authorizing levy and collection of taxes on services; and on sale or purchase of goods are distinct, mutually exclusive; not concurrent or overlapping and are plenary assignments within allocated fields, to the appropriate legislature, under our federal constitutional architecture. It is the established principle under our Constitution that allocation of legislative fields which are generic and those authorizing taxation are distinctly enumerated; that taxation is not an ancillary power to be deduced from the general regulatory power; that taxing power may be exerted only qua an Entry in the appropriate legislative List which specifies such power; that generic legislative fields do not inhere or accommodate taxing powers; and that taxing powers are distinctly specified and only in Lists I and II (the Union and State Lists); and not in List III (the concurrent List) of the Seventh Schedule of the Constitution, vide - M.P.