TaxTMI 
TaxTMI 
2019 (6) TMI 204
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....ning or Installation Service", "Works Contract Services" and "Maintenance and Repair Services" since May, 2005. It is basically engaged in laying and setting up of Transmission Lines and allied works for the Wind Mill projects of M/s Suzlon Infrastructure Services Ltd. Information was gathered that the appellant had been collecting Service Tax from the clients for providing Erection, Commissioning or Installation Services (hereinafter referred to as ECIS) for the various Wind Mill projects carried out in Maharashtra, Gujarat, Madhya Pradesh and Rajasthan, but was not filing the ST-3 Returns since the inception of the unit and was also not discharging the Service Tax liability. 3. A show cause notice dated 21 October, 2010 was, accordingly, issued to the appellant mentioning therein that from the facts collected it was clear that the activities carried out by the appellant fell under the category of ECIS as defined under Section 65(39a) of the Finance Act, 1994 (hereinafter referred to Act) and was taxable under Section 65 (105) (zzd) that defines this service to mean any service provided or to be provided to a customer by a Commissioning and Installation Agency in relation to EC....
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....major portion of the material was provided by M/s Suzlon Infrastructure Services Ltd. It is for this reason that the Adjudicating Authority found that the essential character of the contract was service contract simplicitor. The Adjudicating Authority, therefore, concluded that there was a short payment of Service Tax to the extent of Rs. 2,52,82,721/-. The Adjudicating Authority also found as a fact that the appellant had paid freight amount to a Goods Transport Agency during 2005-06 to 2004-10 but had not paid Service Tax on the same under the 'Transport of Goods by Road Services'. 5. It needs to be stated that the appellant, during the course of investigation, had deposited an amount of Rs. 69,14,934/- and that is why this amount has been appropriated in the impugned order. The operative part of the order dated 24 February, is reproduced below:- "i. I hereby confirm the demand of Rs. 2,52,82,721/- (Rs. Two Crore fifty two Lakhs Eighty two thousand seven hundred twenty one only) and order for recovery from the Noticee in terms of Section 73 of the Finance Act, 1994. I order for appropriation of Rs. 69,14,934/- against the demand. ii. I hereby confirm the dema....
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....sport Agency Services" and, therefore, the appeal deserves to be dismissed; and ii. That the contention of the appellant that he had deposited Service Tax which has not been appropriated, can best be examined by the Adjudicating Authority on production of documents. 8. We have considered the submissions advanced by learned counsel for the appellant and the learned Authorized Representative for the Department. 9. To examine the first contention of learned counsel for the appellant that the taxable service that the appellant was actually providing was WCS and not ECIS, it is necessary to examine the contract that was entered into between the appellant with M/s Suzlon Infrastructure Services Ltd. A perusal of one such contract dated 5 January, 2004 clearly demonstrates that it is a composite works contract for supply of material and packing and erection, assembly testing and commissioning of entire work covered under the invitation to bid. The Adjudicating Authority also found as a fact that the appellant was required to make a minor supply of the material but major portion of the material was supplied by M/s Suzlon Infrastructure Services Ltd. and that invoices had bee....
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....ipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;" 13. The Supreme Court in Larsen & Toubro examined as to whether Works Contract Service can be classified under Section 65(105)(zzzh) and held that the scope of Section 65(105) (zzzh) is limited to cover contract of service simplicitor only and not a composite works contract. The Supreme Court noticed that it is only w.e.f 01 June, 2007 that Section 65(105)(zzzza) was introduced to cover composite works contract and so works contract cannot be covered under any other category of services prior to 01 June, 200....
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....d in the execution of the works contract. This not having been done by the Finance Act, 1994, it is clear that any charge to tax under the five heads in Section 65(105) noticed above would only be of service contracts simpliciter and not composite indivisible works contracts. xxxxxxx xxxxxxx xxxxxxx 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines "taxable service" as "any service provided". All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts....
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....is that is altogether different from that of the demand made upon the appellants. That is not "moulding" relief. The demand that was made upon the appellants was under Tariff Item 68 and it proceeded upon the basis that there was a process of manufacture of coloured polystyrene from uncoloured polystyrene. Having come to a conclusion against the Revenue on these counts, the appropriate order for the Tribunal to have passed was to have set aside the demand and left it open to the Revenue to proceed against the appellants, as permissible under the law. The appellants would then have had the opportunity of meeting the precise case made out by the Revenue." 18. This is what was also observed by the Supreme Court in Reckitt & Colman of India in paragraph 3 of the judgment which is reproduced below : "3. It will be remembered that the case of the Revenue, which the appellant had been required to meet at every stage from the show cause notice onwards, was that the said product was a preparation based on starch. Having come to the conclusion that the said product was not a preparation based on starch, the Tribunal should have allowed the appeal. It was beyond the competence of ....