2017 (9) TMI 31

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.... large turnkey projects. They entered into contracts with New Tirupur Area Development Corporation Ltd (NTADCL) which was incorporated as a public limited company by the Government of Tamil Nadu in respect of engineering contract and construction contract on 29.10.2002. NTADCL executed a single co-ordination agreement on 29.10.2002. The relevant clauses of the co-ordination agreement are reproduced below :- 2. Single Obligation 2.1 HCC being the contractor under engineering contract and construction contract, the separate obligation under the contract shall constitute a single obligation of HCC. Notwithstanding anything contained in the contract, HCC agrees that it shall be liable under the contracts to the same extent as if the engin....

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....missioner (Appeals) against the rejection of refund, who upheld the rejection of refund. Against such order of rejection of refund of Rs. 2,84,16,309, the appellants filed appeal before the Tribunal and vide F.O.No.434/2008 dt.30.4.2008 the Tribunal held that the appellants did not render Consulting Engineering Services to NTADCL and therefore they are eligible for refund. Though the Department filed appeal against this CESTAT order before the Hon'ble High Court, the same was dismissed for non-prosecution vide judgement dated 19.12.2014. Thus the issue whether the appellants are liable to pay service tax under the category of Consulting Engineering Services under the said contract has attained finality. 3. Meanwhile, Department issued a ....

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....er of Central Excise (2006) (3) STR 124 (Tribunal) thus observing that turnkey contract cannot be vivisected to demand service tax solely on Consulting Engineering Services . The appeal filed by the Department against such order having been dismissed by the Hon'ble Madras High Court, the issue has attained finality. The Ld.Counsel also argued that the indivisible works contract are not subject to levy of service tax prior to 1.6.2007 as laid down by the Hon'ble Apex Court in the case of L&T Ltd, 2015 (39) STR 913 (S.C.). He argued that contract is a composite contract involving material and labour which is evident from Clause 2.2 of the coordination agreements which specifies that both the engineering contract and construction contract shal....

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....erent purposes, as explained below : 4.2 The Glause N of Engineering Contract reads as below :- "the contractor has agreed to enter into this Engineering Contract with owner specifying the terms and conditions in relation to certain design and engineering of the facility which will be designed by the contractor so that upon construction, commissioning and testing in accordance with the Construction Contract, the facility will be achieving the test on completion as set out in the construction contract" The Glause N of the Construction Contract reads as below:- "the contractor has agreed to enter into this procurement and construction contract with owner specifying the terms and conditions in relation to detailed design, construct....

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....d Construction Contract were co-ordinated by the Co-ordination Agreement dated 29.10.2002 as the contractor was the same. The Co-ordination Agreement did not change the nature of the work carried out, it is to be seen that the cost of Engineering Contract and the Construction Contract was separately agreed upon. The nature of work to be carried out were specified in each of the contracts and therefore the works referred in the Engineering Contract and the work undertaken by appellants for implementing the Tirupur Water Project is rightly classifiable under Consulting Engineering Service . Therefore, appellants are liable to pay service tax on the Engineering Contract prices. The demand raised is therefore legal and proper and the appellants....