TaxTMI 
TaxTMI 
2019 (3) TMI 978
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....y by availing benefit of Notification No.1/2006-ST dt. 1.3.2006 namely, after availing 67% abatement on the value of taxable services under the category of Erection, Installation or Commissioning services. It was noted by department that the machinery and equipment were supplied by service recipient. From perusal of purchase orders and agreements between the appellants and the service recipient Nortel Networks (India) Pvt. Ltd. (hereinafter referred to as Nortel), it appeared that in all invoices issued to customer, it has been declared by appellants as "service charge" only. The department was of the view that to avail the benefit of notification, the plant, machinery, equipment and other material should be supplied by the service provider....
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.....4 was adjudicated which culminated in order dt. 29.04.2011 (impugned order) passed by Commissioner (Appeals). Hence Appeal ST/463/2011. 3. Today when the matter came up for hearing, on behalf of the appellants, Ms. P. Jayalakshmi made oral and written submissions which can be broadly summarized as under : (i) The issue involved in the instant appeals is no more res-integra and is covered by the decision of the Hon'ble Supreme Court in the case of Commissioner Vs. Larsen & Toubro Ltd. 2015 (39) S.T.R. 913 (SC), where in it was held that works contract is not taxable prior to 01.06.2007. This decision has been followed by the order of this Hon'ble Tribunal in the case of URC Construction (P) Ltd Vs. Commissioner of Central Excise, Salem 20....
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....rpose of execution of the contract and the contractor is a bailee in respect of such materials. (iv) The appellants submits that the explanation to the said Notification cannot result in a taxation of an item which is not contemplated in charging section and is beyond even the legislative competence of the Parliament. If materials supplied to the service provider has to be added to the contract value and then 67% abatement is to be calculated, it would amount to a service tax levy on 33% of the value of the materials supplied by the client, which is not within the scope of the contract of the contractor and would amount to levy of service tax on a material component as well as on an item which is not even received or enjoyed by the contrac....
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.... including without limitation equipment, documentation, software, tools etc. supplied by Nortel Networks or the Customer remains the property of Nortel Networks or the customer at all times. 4.4 Further, in all invoices issued to Nortel, it has been declared by the appellant that "service charges only" and also declared that "materials supplied by the party". 4.5 Appellants in their letter dt. 21.09.2007 regarding scope of work, they themselves admitted that "major equipment" would be supplied by customer Nortel; that their scope of work would only be erection, installation and commissioning of towers including foundation works and electrical works. 4.6 Even if the appellants have used some material belonging to them for the services pro....
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....tworks be liable for such expenses or costs. 5.3 Further perusal of the purchase order and invoices indicates that the appellant's activities are not restricted only as a service provider simplicitor, for example a purchase order / invoice clearly indicate "supply and installation of power cables multi strand, Armoured copper UG, Tower implementation, shelter erection on site, supply and installation of earthing pits, supply and installation of aviation lamp for towers and so on. The SCN has also alluded to the appellant's letter dt. 21.09.2007 wherein the appellants have reported to have informed that "major equipment" would be supplied by the customer Nortel. While this may very well be so, there is no allegation by the department that e....