2009 (12) TMI 437

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....7 e. Penalty - Rs.2,80,00,000/- u/s 78. Miscellaneous application No.ST/Misc./402/09 is for inclusion of additional grounds of appeal. It will be disposed off at the time of final disposal of appeal. 2. The issue involved in this case is regarding the service tax liability on the appellant as regards the services rendered by them to the Govt. of Andhra Pradesh in form of turn key projects executed by them for the construction of dam, canals, distributory system to feed various ayacut, land etc. the Revenue proceeded against the appellant on the ground that such an activity would fall under the category of works contract and will be covered under the definition of 'works contract' more specifically under sub-clause (e) "turnkey proj....

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....e providing the services to the Govt. of Andhra Pradesh for the irrigation system i.e. construction of reservoir canals etc. which is of non-commercial nature. 4. Ld. Special Counsel on the other hand would submit that the Revenue is taxing this activity under the category of works contract as the projects executed by the appellant for the Govt. of Andhra Pradesh would directly fall under the category of turnkey projects. It is the submission that the title of the agreement entered by the appellant with Govt. of Andhra Pradesh clearly indicates that it is a turnkey project and hence it would be directly covered under the category of 'works contract'. It is the submission that the adjudicating authority has correctly come to the conclusio....

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....is sub-clause, "works contract" means a contract wherein,- (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out,- (a) Erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning included related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) Construction of a n....