2013 (12) TMI 624

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....on Service", for the period December 2005 to September 2009; confirming demand of service tax of Rs.28,94,07,221/- under the taxable "Works Contract Service", for the period June 2007 to September 2009; appropriating Rs.44,45,277/- already remitted by the petitioner/appellant and for adjustment towards the demand pertaining to "works contract service"; levying interest under Section 75; penalty under Section 77; and penalty equivalent to the service tax assessed, under Section 78 of the Act as specified, is assailed the substantive appeal. 2. The petitioner during the period in question entered into several contracts, 12 in number; 11 pertaining to provision of the taxable 'works contract service' entered into with the Irrigation and CAD....

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....unsel would contend that a turnkey project must comprise the entirety of the project and not one or a few components of the whole. We neither find a practical, commercial or contemporaneous guidance for such creative interpretation of the expression 'turnkey project'. The relevant provision, Section 65 (105) (zzza) enacts that the 'works contract' means a contract wherein - (ii) such contract is for the purposes of carrying out, - (e) turnkey projects, including engineering, procurement and construction or commissioning (EPC) projects. We are not advised at present that turnkey project means the whole universe of the larger enterprise. On a prima facie view of the matter, a turnkey project i.e. EPC contract means any contract involving exec....

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....from which "works contract" was enacted as a distinct taxable service and in fairness, those contracts, anterior to 1.6.2007 would not come within the tax net under that category. This contention is also stated to be rejected. With effect from 1.6.2007, 'works contract' is enacted to be distinct taxable service. Only this taxable service provided or to be provided and remuneration received for such service provided or to be provided after 1.6.2007 would thus fall within the ambit of the levy of tax under this category. 5. In so far as determination of the petitioner's liability to tax and the concomitant imposition of interest and penalties on the other taxable - "commercial or industrial service" is concerned, the contention of the peti....

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....h effect from 1.6.2007, the present stage is inappropriate for a detailed analysis as to whether "works contract" service is a distinct and stand alone taxable entity or is carved out partly or wholly from the earlier "commercial or industrial construction" service, enacted later. 7. Another contention is that despite the specific claim by the petitioner for the benefit of abatement to the extent of 67% of the gross taxable value, the claim for this benefit was unreasonably rejected. Exemption Notification No.15/2004 dated 10.9.2004 and the later Notification No.1/06 dated 1.3.2006 grant abatement in relation to commercial or industrial construction service to the extent of 67% of the gross value, subject to the conditions stipulated the....