TaxTMI 
TaxTMI 
2010 (8) TMI 543
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....r sections, followed by interest. 2. Revenue was of the view that the activity carried out by the appellant for the Petroleum companies namely IOCL, HPCL, BPCL, MRPL, was commercial and industrial construction service for use by petroleum industry being specifically designed work for such industries. Such a conclusion of the revenue is controverted by the appellant in this appeal. The appellant submitted that the activity carried out was a 'works contract' within the definition of Section 65(105)(zzzza) in view of transfer of property in goods involved in the execution of the works contract and such service came into taxation from 1-6-2007. 3. Learned AR appearing on behalf of appellant submits that when there was service tax demand of Rs. 17,45,337/- in adjudication, that was reduced to Rs. 14,00,000/- (approximately) at the first appellate stage. Learned appellate authority, considering various aspects of the matter modified the adjudication order to reduce the demand to such an extent and directed for quantification of the demand. The quantification if made in a reasonable manner, the service tax demand may be Rs. 14,00,000/- approximately. 4. The plank o....
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....des and perused the records. 7. We have heard this matter yesterday. But the appeal folder did not contain adjudication order. Therefore this was adjourned, to be heard today calling that order to form part of the record. We have the advantage of reading the adjudication order today. In the adjudication order, learned ajdudicaitng authority examined the scope of work that was carried out by the appellant. We do not appreciate that the new entry under Section 65(105)(zzzza) of the Act has brought any confusion for which the appellant seeks leniency. We are at the interim stage. We are not making any expression of opinion except the legislative object in one hand, interest of revenue and the undue hardship that may be caused by this interim order. We are equally conscious that we are not passing this order unmindfully. 8. To strike a balance at the interim stage, we have made thorough enquiry into the scope of the taxation entries in Section 65(25b) and Section 65(105) (zzzza) which is advocated today of being conflicting in nature. Revenue leans heavily on Section 65(25b) of the conceiving that the very act of the appellant was to serve the purpose of commerce and in....
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....vices shall be determined according to the terms of the sub-clauses of clause (105) of section 65; (2) When for any reason, a taxable service is, prima facie, classifiable under two or more sub-clauses of clause (105) of section 65, classification shall be effected as follows :- (a) the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description; (b) composite services consisting of a combination of differnt services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which gives them their essential character, in so far as this criterion is applicable; (c) when a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merit consideration." Section 65A being embedded to the statute that cannot be read in isolation of Section 65(25b) to serve it's purpose. The principles laid down for classification embraces the activities of the appellant to the appropriate category which the legislature intended by Se....
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.... of goods followed by services to achieve the purpose enumerated by sub-clause (i) of Section 65 (105)(zzzza) of the Act. Those are brought by this specific entry under the caption of works contract service without making other entries otiose or redundant. The new entry does not repeal the previous entry appearing under Section 65(25b) nor also the new entry tries to encroach over the previous entry, so also the new entry does not make the previous entry redundant. Once such view is prima facie possible, revenue's interest cannot be prejudiced in view of the judgement of the Tribunal in the case of Sunil Hi-Tech Engineers Ltd., (supra) cited by Revenue. It is left open to both sides to still satisfy about the object of two different entries as to whether in any manner conflicting with each other, in the course of regular hearing since scope and ambit of the entries to classify the service according to guiding principles of Section 65A shall meet the tests of law. But at this stage it appears that the entries are independent of each other to serve the object of law within their exclusive scope and ambit without encroaching each other. 12. While we agree with the learned AR t....