2006 (9) TMI 15

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....de the order-in-original passed by the Assistant Commissioner on 2.2.2005 under which the Assistant Commissioner had demanded Rs. 12,36,516/- along with interest and penalty. The respondent in this case is admittedly an engineering firm engaged not only in the manufacture of fabrication and construction of plants and machines, but also accepting contracts for drawing, designing, engineering, erection, commission and testing of plants and machines. The respondent's contention that they were not qualified professionals was held by the Assistant Commissioner as "illogical and incorrect" and that they fulfilled the criteria of the statutory definition of consulting engineering. In paragraphs 13, 14 and 15 of order-in-original, the learne....

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....in the case of M/s. L&T (supra), the work contract cannot be vivisected to select, activities which comprise taxable services. Therefore, following the decisions of the CESTAT, I hold that service tax cannot be charged from the appellants in respect of design and engineering activities as indicated in the impugned order." 4. Aggrieved by the order of the Commissioner (Appeals) the matter has come before us. None appeared on behalf of the respondent despite notice. The learned authorized representative of the department has drawn our attention to the fact that the respondent had raised separate bills in respect of designing and engineering against which service tax ought to have been paid 5. Referring to the memorandum of Association o....

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.... respondent in respect of design, engineering, drawings and documentations. Thus, a contract price of Rs. 23,17,000/- out of the total contract price of Rs.3,66,82,000/- has been worked out and spelt out in no unclear terms. In the Same letter, it has also been stipulated that the total price was inclusive of "all taxes and duties of divisible contract basis as per agreed terms and conditions". 6.3 Referring to the Black's Law Dictionary, the term "divisible contract" whose synonym is "severable contract" is defined as under: "Severable contract -A contract that includes two or more promises each of which can be enforced separately, so that failure to perform one of the promises does not necessarily put the promisor in breach of t....