TaxTMI 
TaxTMI 
2020 (12) TMI 1015
X X X X Extracts X X X X
X X X X Extracts X X X X
....h 1, 2006 in respect of 'commercial or industrial construction service' CIC and 'erection, commissioning or installation service' ECI. The period of dispute is from March 1, 2006 to March 31, 2009. 3. The Appellant is a private limited company. It was registered with the Service Tax Department under the category of 'CIC', 'ECI', 'consulting engineer', 'works contract', 'technical testing and analysis service' and 'goods transport agency service'. The Appellant executes large size Civil Engineering Projects and Turnkey Civil Construction Contracts mainly for Steel, Power and Infrastructure Sectors. 4. The Appellant along with M/s. Danieli & C Officine Meccaniche SPA, Italy, M/s. Siemens Ltd., Mumbai and M/s. Beekay Engineering Corporation entered into a consortium for execution of various works. The consortium members entered into agreements with the principals, namely M/s. Bhilai Steel Plant. and M/s. Durgapur Steel Plant to execute the entire turnkey project. Each of these contracts involved the following services: (a) Design and Engineering; (b) Civil Engineering Work, (c) Supply of fabricated Steel Structures; (d) Erection of Steel Struc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....confirmed with interest and penalties. Aggrieved by this order, the Appellant filed an appeal before this Tribunal and by decision dated October 30, 2009, the matter was remanded to the adjudicating authority. Aggrieved by the said order of the Tribunal, the Appellant filed an appeal before the Supreme Court, which was admitted on July 8, 2010 but was dismissed as withdrawn on August 6, 2015. In the meantime, the show cause notice dated November 21, 2008 was again adjudicated and an order was passed on February 29, 2012. 12. Another show cause notice dated October 13, 2009 was issued to the Appellant for the subsequent period 2008-09 on the same grounds as the first show cause notice. Service tax demand of Rs. 1,61,82,519/- was proposed with recovery of interest and imposition of penalties. This show cause notice was also adjudicated by the order dated February 29, 2012. 13. The Appellant filed two separate appeals against these orders dated February 29, 2012 before the Tribunal. Both the appeals were decided by a common order dated April 12, 2013. The Tribunal, again remanded the matter for fresh adjudication. The two show cause notices were thereafter adjudicated by an orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of CIC (commercial and industrial construction Service). This Cenvat credit pertains to the first part of the said Annexure-J and contains the list of total documents which were issued prior to 01.01.2006 and is composed of various services as mentioned in pre-para which are in nature undisputed input services (other than Consulting Engineer Services) for Commercial and Industrial Construction Services provided by the Noticee. The availment of Cenvat credit has not been distinguished by the Noticee in their reply during the original proceedings, therefore, I find that the duty liabilities for the Month of March 2006 has been made by the Noticee by payments through Cenvat credit therefore they have infringed the conditions of the ruling Notification No. 1/2006-ST dated 1.3.2006 by availing and utilizing Cenvat Credit of Service Tex. Therefore, the abatement is not admissible to them during the said month and Service Tax of Rs. 35,34,746/- (Service Tax), Rs. 72,695/- (Edu Cess ) as demanded for the month in the annexure to the Show Cause Notice dated 21-11-2008 is recoverable from them. 10.23 ****** I find that the entire tenor of the agreement and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs. 3,14,100/- and S.H. Edu Cess Rs. 1,63,875/-, total Rs. 1,61,82,519/- (Rs. One Crore Sixty One Lakhs Eighty Two Thousand Five Hundred and Nineteen only) on account of service tax payable on disallowed abatement and order for its recovery under section 73 along with interest under section 75 of the Finance Act, 1994. ii) I impose a penalty at the rate of two percent from the due date of payment to the actual date of payment on the amount of Service Tax evaded subject to the limit of amount due upto 10-5-08 under section 76 of the Finance Act, 1994. iii) I impose a penalty of Rs. 1000/- under section 77 of the Finance Act, 1994. iv) I impose a penalty of Rs. 1,61,82,519/- (Rs. One Crore Sixty One Lakhs Eighty Two Thousand Five Hundred and Nineteen only) under section 78 of the Finance Act, 1994. If the amount of Service Tax along with the interest together with twenty-five percent of the penalty is paid within thirty days of the communication of this order, the said penalty will stand reduced to twenty-five percent. (emphasis supplied) 15. This appeal has been filed against that part of the order of the adjudicating authority that it is preju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....utput services provided by the Appellant prior to March 1, 2006. This is evident from break-up of the amount billed in the month of March 2006 under CIC and details of service tax lability paid thereon, and invoices raised in the month of March 2006; (iv) Even otherwise, the credit of Rs. 6,26,509/- along with interest of Rs. 7,28,366/- has been reversed by the Appellant; (v) The show cause notice and the impugned order have failed to establish suppression/mis-declaration on the part of the Appellant. Therefore, the extended period of limitation could not have been involved; (vi) The Appellant is entitled to cum-tax benefit; and (vii) Interest is not recoverable, and penalties are not imposable. 17. Shri K. Poddar, learned Authorized Representative of the Department has however, supported the impugned order and has submitted that it calls for no interference in this appeal. The submissions are as follows: (i) The ST-3 return for the month of March 2006 filed by the Appellant reflects payment of Rs. 2,14,526/- through CENVAT credit account for CIC. Thus, the duty liabilities for the month of March 2006 have been discharged by the Appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and this fact is also evident from the impugned order. Thus, the said credit has been utilized for output services provided by the appellant prior to March 1, 2006. The restriction/condition contained in the Notification dated March 1, 2006 would, therefore, not apply. 22. This apart, even if the credit availed prior to March 1, 2006 has been utilized after March 1, 2006, the same cannot be denied as was held by the Tribunal in M/s Shapoorji Pallonji & Co. Ltd. vs. Commissioner of Central Excise, Pune 2015 (11) TMI 225-Cestat Mumbai. The relevant portion of this decision is reproduced below : "6.2 Firstly the said Notification 1/2006-ST came into the effect from 01.03.2006. In the case in hand the appellant had taken a plea before the lower authority that the CENVAT credit availed by them on the service tax paid by various service providers were in respect of the services rendered before 01.03.2006 and there was no restriction for availing such CENVAT credit and claiming abatement from the total value of the bill. It is also the plea of the appellant before the lower authority that post 01.03.2006 they have not taken CENVAT credit of the service tax paid by various service prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Principles and the Consortium Members is a composite contract for provision of services and supply of goods. According to the appellant, the composite contract has the essential character of a "works contract", as it involves both supply of goods as well as provision of services. Hence, the various services provided by the appellant under the agreement will more appropriately being classified under 'works contract' service which became taxable w.e.f June 1, 2007. The impugned order also records a finding that the contract involves provision of services as well as supply of goods. Thus, the demand raised for a period prior to June 1, 2007 is not sustainable. Even for the period post June 1, 2007, the demand cannot be sustained as it has been raised under CIC and ECI and not under "works contract" service. 27. The contention of the learned Authorized Representative of the Department is that since the appellant registered itself under the head of CIC or ECI, it cannot now contend that the services rendered by it would be classified under 'works contract' service. 28. This contention cannot be accepted in view of the decision of the Gujarat High Court in M/s. N J Devani Builders....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontracts, and the measure of tax only be on that portion of works contracts which contain a service element which is to be derived from the gross amount charged for the works contract less the value of the property in goods transferred in the execution of the works contract. In such circumstances, the Apex Court held that when the legislature has introduced the concept of service tax on indivisible works contracts then such contracts were never intended to the subject matter of the service tax, and therefore, such contracts, not being exempt under the Finance Act, 1994, cannot be said to fall within its tentacles, as which was never the intention of Parliament. The Apex Court, therefore, held that the levy of service tax on works contract was non-existent prior to 01.06.2007. 7. We are therefore of the opinion that the impugned order passed by the Tribunal in Service Tax Appeal No. 107 of 2009 is without jurisdiction and contrary to the law laid down by the Apex Court in the case of L & T Ltd. (supra). The Tribunal has further erred in brushing aside the decision of the Coordinate Bench by referring it to be the decision of the Mumbai Tribunal which is contrary to the reco....