TaxTMI 
TaxTMI 
2016 (10) TMI 237
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....Act, 1994. Briefly the facts of the present case are that the appellant is providing services under the category of Consulting Engineer and have obtained Service Tax Registration. On the basis of intelligence that the appellant did not discharge the service tax liability correctly and suppressed the value of taxable service to the Department, the Preventive Wing of the Commissionerate conducted the investigation. On scrutiny of the relevant documents viz. Balance Sheet, Profit and Loss Account, Invoice/Contract etc. it was revealed that apart from rendering Consulting Engineering services, the assessee provided a number of other taxable services for which no service tax was paid, in contravention of statutory provisions. Thereafter a show-c....
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....635 Consulting Engineer 10 Testing charges 13,600 1,088 Consulting Engineer 11 Troubleshooting 5,19,992 33,148 Consulting Engineer 12 Design & Engineering Charges 11,82,800 59,100 Consulting Engineer 13 Drawing Charges 2,86,74,425 22,48,654 Consulting Engineer 14 Erection, Commissioning charges 87,18,326 6,97,466 Erection, Commissioning & Installation 15 Mechanical Commissioning charges 60,000 4,800 Erection, Commissioning & Installation 16 Service charges towards supply of equipments 3,20,20,884 23,31,297 Consulting Engineer 17 Engineering Charges 3,08,01,351 17,71,431 Consulting Engineer 18 Earthing Philosophy ....
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....nterest. 2. Heard both the parties and perused the records. 3. Learned counsel for the appellant submitted that most of the activities were performed under contracts of composite nature and the same cannot be vivisected into two parts containing supply of goods and provision of services for the sake of levying service tax. He further submitted that there was a lack of machinery provisions in the Act to levy service tax on composite contracts/works contract and as per the intention of the parties in the impugned transaction the primary objective of the agreement was that of sale. He further submitted that the issues involved in the present case is no more res integra and has been settled in favour of the appellant by the Hon'ble Suprem....
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....aras (f), (g) and (h). Under each of these paras, a bifurcation has to be made by the charging Section itself so that the cost of establishment of the contractor is bifurcated into what is relatable to supply of labour and services. Similarly, all other expenses have also to be bifurcated insofar as they are relatable to supply of labour and services, and the same goes for the profit that is earned by the contractor. These deductions are ordinarily to be made from the contractor's accounts. However, if it is found that contractors have not maintained proper accounts, or their accounts are found to be not worthy of credence, it is left to the legislature to prescribe a formula on the basis of a fixed percentage of the value of the entire....
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....ted at 2013-TIOL-908-HC-DEL-ST had observed and held as under: "41. We are afraid that there are several errors in this paragraph. The High Court first correctly holds that in the case of composite works contracts, the service elements should be bifurcated, ascertained and then taxed. The finding that this has, in fact, been done by the Finance Act, 1994 Act is wholly incorrect as it ignores the second Gannon Dunkerley decision of this Court. Further, the finding that Section 67 of the Finance Act, which speaks of "gross amount charged", only speaks of the "gross amount charged" for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service eleme....
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....preme Court the appellant s following services/activities are not liable to tax and to that extent the Order-in-Original is without authority of law. Sl. No. Details of activity Service Tax 1 Annual Maintenance Contract 1,26,700 2 Civil Works 19,32,213 3 Erection 95,284 4 Commissioning service charges 15,043 5 Deputation of Engineers 44,795 6 Installation Final Report 22,500 7 Installation supervision charges 12,500 8 Supervision charges 51,635 9 Testing Charges 1,088 10 Troubleshooting 33,148 11 Design & Engineering Charges 59,100 12 Drawing Charges 22,48,654 13 Engineering charges 17,71,431 14 Earthing Philos....