Hon'ble Judges/Coram:
C.L. Mahar, Member (T) and Rachna Gupta

ORDER

C.L. Mahar, Member (T)

1. The facts of the matter are that the respondent/assessee is registered with the department for various services such as erection, commissioning and installation services; construction services in respect of commercial and industrial buildings and civil structure and work contract service. They are also registered for business support services as well as under GTA services. A show cause notice dated 18th October 2013 came to be issued to the respondent/assessee saying that they have divided their entire work into two parts of work contract service, one for supply of goods (where no service tax has been paid) and second for construction of civil structure on which a service tax @ 4.12% has been paid under the composite work contract service. The above show cause notice has been issued as the department has entertained a view that composite work contract were divided by the respondent/assessee into two parts which was otherwise a composite work contract. It has also been alleged that by dividing the work contract into two parts and paying service tax applicable for one work contract (composition scheme for payment of service tax) an amount of Rs. 21,01,50,386/- has been evaded by the respondent. The other provisions with regard to Section 75, 76, 77(d) and 78 of the Finance Act, 1994 has also invoked. The basic contention of the department has been that since the contracts given to the respondent/assessee by various electricity departments are primarily composite contracts and the service tax @ composite scheme (4.12%) was only available when the value of services alongwith the value of supply of goods is included in the service taxable value of the service. The matter was adjudicated by the Commissioner who vide his order dated 10/06/2015 has set aside the show cause notice and the allegations as raised in the show cause notice have not been upheld by the learned Commissioner. Feeling aggrieved by the above impugned order of the Commissioner, the department is in appeal before us alleging that the order-in-original is not legal and proper and therefore same has been reviewed by Competent Authority under Section 86(2) of the Finance Act, 1994. It has been the contention of the department that the respondent/assessee by splitting the single work contract into separate contracts had evaded payment of service tax and Adjudicating Authority has failed to appreciate the respondent were engaged in business of execution of EPC contracts pertaining to setting up of that electric service station on turkey basis to various state electricity companies.

2. The Adjudicating Authority, as per the department has grossly erred in holding that with regard to Works Contract under dispute in the instant show cause notice, the noticee was discharging their service tax liability as per Rule 2A of the Service Tax (Determination of Value) Rules, 2006 and not as per Work Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. Whereas, para 2.1 of the order-in-original clearly evidences that noticee was paying service tax @ 4.12% on the Works Contracts for Construction of Civil Structures which is the rate of service tax applicable to an assessee who opts for payment of service tax under Composition Scheme of Works Contract and is not the rate as may be applicable to an assessee paying service tax under Rule 2A of the Service Tax (Determination of Value) Rules, 2006 i.e. full rate of tax, still a contrary view has been taken by the Adjudicating Authority.

3. It is the contention of the Department that the Adjudicating Au........