TaxTMI 
TaxTMI 
2018 (2) TMI 1054
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....r piping and pumping system for M/s Raj West Power Limited and Common Effluent Treatment Plant and RO System for ELDCO SIDCUL Industrial Park at Sitarganj in Rajasthan. Their work relating to these two projects are subject matter of dispute in the present appeals. The appellants in respect of raw water piping and pumping system project discharged service tax on the activity of erection and commissioning of such supply system claiming that the materials like pipes, pumps, motors required for such supply system was separately done under a supply contract. The Revenue entertained a view that the appellants are liable to service tax under works contract service and for the same, gross value which includes the materials supplied also should have....
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....the impugned order submitted that in respect of raw water piping and pumping system they had entered into two contracts, both dated 20/08/2007, one for supply of goods and another for erection. The coordination agreement dated 30/08/2007 is only for due coordination and to fulfill the respective obligations of supply contractor and service contractor for a smooth completion of the project. Similarly, for Sitarganj project there were two agreements, one for supply of materials and another for civil work and these cannot combined to make a single composite contract. 4. Relying on the decision of Essar Projects (India) Ltd. Vs. CCE & ST, Rajkot - 2014 (33) S.T.R. 696 (Tri. - Ahmd.), the learned Counsel submitted that there is no basis for i....
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....f materials and erection work separately. The fact that the appellant and the service recipient are part of the same group of companies and the wordings of the two agreements alongwith the coordination agreement will make it clear that what is intended by both the parties are the common purpose of execution of raw water piping and pumping system comprising of 184 kms. long pipeline for Lignite Thermal Power Station at Bardesh, Barmer. The terms of the contracts make it clear that both the parties intended a common work and the so called "supplier" and "erection contractor" being one and the same the coordination agreement brings out the facts clearly. There are set of technical specifications pertaining to both the contracts which are ident....
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....for supply of materials and another for execution of work either for erecting piping and pumping of raw water supply or for effluent treatment for two clients. We have considered the discussion recorded in the impugned order as well as examined the contract documents. It is clear that the appellant had shown two contracts both dated 20/08/2007 in respect of Barmer Project. One is claimed to be supply contract and another is claimed to be erection contract. There is a coordination agreement dated 30/08/2007. The excerpts from such coordination agreement as reproduced by the Original Authority is as below :- "Dated 30th day of August, 2007, Co-ordination Agreement between Raj West Power Limited as owner and Jindal Water Infrastructur....
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....to O.P. Jindal Group of Companies as recorded in the impugned order. The Original Authority examining the overall scope of the arrangement recorded as below :- "48. In other words, there is a single Co-ordination Agreement dated 30/08/2007 between the assessee/noticee & M/s Raj West Power Ltd. in respect of the complete project viz., 'Raw Water Piping & Pumping System' which includes supply of material & erection work. Further, there is a set of 'Technical Specifications' pertaining to both the contracts which is referred as Section - III to the supply contract and the erection contract. The 'Technical Specifications' document is common to both the contracts and it is in the form of a "Contract Document Between RWPL & M/s ....
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....ability condition mentioned in Clause 34 of both the agreements are identical. It clearly establishes that as the supplier and contractor is one and the same the warranty and defect liability is to be on the appellant without any distinction for supply contract or erection contract. The defect liability clause in labour contract also talks about "defect in material", "bad materials". Materials are supplied in terms of supply contract which also carries same terms. This alongwith the scope of coordination agreement clearly reveals that the scope of composite works contract is clear and should be read together for the purpose of service tax. In fact, perusing both the contracts (supply or erection), we note that the various clauses are verbat....