TaxTMI 
TaxTMI 
2021 (2) TMI 455
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....were liable to Service tax under the heads of erection, commissioning or installation services Commercial or Industrial Construction service and consultancy engineering services and on these amounts, no Service Tax was paid. The amounts were recorded in their profit and loss account as "Turnkey receipts. Accordingly, a show cause notice dated April 22, 2010 was issued to the appellant invoking extended period of limitation, demanding Service Tax under the aforesaid heads on the differential amounts between the contract receipts as per their ledger account and the amounts shown as receipts in their ST-3 returns, for the period April, 2004 to March, 2008 and service tax amounting to Rs. 6,39,26,719/- was demanded from the appellant. 2. The Show cause notice was adjudicated by the Commissioner vide Order-in-Original number Commissioner/RPR/ST/106/2012 dated November 30, 2012 confirming the demands and imposing penalties as proposed in the Show cause notice. On appeal, CESTAT by Final Order no. 50352/2018 dated January 23, 2018 in Service Tax appeal No. 56346/2013 remanded the matter to the Original Authority directing that the matter may be decided denovo in the light of law laid d....
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....ds component. The mere fact that cost of materials and the cost of services is separately mentioned in the contracts does not alter the nature of the contract and it continues to be a work contract. Service Tax can, therefore, be levied only with effect from June 1, 2007 and only under the head "Works contract services‟. He submits that in their own case with respect to identical type of contracts for a different period, it has been held by this Tribunal that no service tax is payable in the following cases: 1. Commissioner of Service Tax, Raipur vs. Beekay Engineering Corporation [2017-TIOL-1116-CESTAT-DEL]; 2. Commissioner of Raipur vs. Beekay Engineering Corporation [2006 (3) STR 168 (Tri-DEL)] 6. He submits that they specifically pointed out these binding legal precedents to the Hon‟ble Commissioner. Learned Counsel produced a copy of written submissions made by them before the Hon‟ble Commissioner, paragraph 25 of which read as follows: "25. The department preferred appeals against the orders of the Commissioner (Appeals) before CESTAT. In both appeals, it was argued by the department that as separate prices for goods and service....
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....c. The well-defined and demarcated services separately attributed to the various companies in the contracts such as Drawing Design, Supervision of Erection and commissioning, Erection and commissioning. These contracts are in fact contract for execution of facilities on Divisible Turnkey basis. The instalment payment is made consequent upon completion of actual work description wise as mentioned in Bills/ invoices raised by the Noticee for separate aspect of work covered in each contract. 5.19 In view of above, legally such divisible contracts can be subjected to tax both as a sales and a Service, therefore all the constituents of the works contract that confirm to the definition of Service namely in this case Erection Commissioning and installation of Commercial, industrial construction service and Consulting Engineers Service are liable to be taxed under their respective heads, the liability starts with the date of imposition of Service tax on the said Services. Service Tax is payable on constituents of the said turnkey projects which confirm to the definition of Service tax under relevant respective heads. Therefore, in cases where the Noticee are executing turnkey proj....
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....re-commissioning, start-up and commissioning and demonstration and establishment of performance guarantee parameters of the Facilities on divisible turnkey basis; and" 11. The argument of the Revenue is that the contracts are divisible not only between the different individual companies of the consortium but also between the supply of goods and rendering of services, these cannot be treated as composite works contracts. Service Tax can be levied on the service component of such contracts under the respective heads. 12. This submission cannot be accepted. Identical matter came up before this Bench in respect of same assessee in the case of Beekay Engineering as reported in 2017-TIOL-1116-CESTAT-DEL, paragraph 2 and 7 of which are reproduced below: 2. The assessee has carried out various projects at Bhilai Steel Plant involving provision of various services such as designing an drawing, erection and commissioning of the plant and machinery, supervision of erection and commissioning, technical testing etc. The Department carried out enquiry into the allegation that the assessee has not discharged service tax on the contracts executed by them. This resulted in issue of S....