TaxTMI 
TaxTMI 
2023 (5) TMI 764
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....be an infrastructure construction company engaged in executing turnkey projects in various fields, such as, irrigation projects and power projects. M/s Bhilai Electric Supply Company Limited Bhilai Electric is a company engaged in generation of electricity and it awarded a contract for setting up of a power plant to M/s Bharat Heavy Electricals Limited BHEL. BHEL sub-contracted a portion of the work to the appellant by a work order dated July 08, 2005. The job to be performed by the appellant under the work order was of land development which involves earth work, excavation, back filling, site levelling, grading and disposal. 4. A show cause notice dated August 29, 2006 first show cause notice was issued to the appellant for the period July 2005 to August 2006 proposing a demand of service tax of Rs. 1,51,14,126/- on the allegation that the appellant had undertaken the activity of preparation of site for the power plant which would be covered under the category of "site formation and clearance, excavation and earthmoving and demolition' services as defined under section 65(97a) of the Finance Act, 1944 the Finance Act which was taxable under section 65(105)(zzza). The show cause n....
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....2008 because the assessee has disclosed in its return this figure due to bifurcation of return periods. The same gross value has undergone taxation and cannot be doubly taxed. But learned Commissioner denied that. But Revenue supports order of Authority below. 2. Upon hearing the matter and pleading of both sides, we have remanded the matter in Appeal No. ST/92 of 2008 in the manner indicated aforesaid. Therefore consequence of appeal No. ST/92/2008 having bearing on this appeal, pleading of double taxation can be factually examined and both cases can be taken up for disposal commonly to appreciate totality of facts and circumstances. To grant a fair opportunity of defence, we make it clear to the appellant that the appellant shall appear before learned Adjudicating Authority and satisfy him that the gross value of service giving rise to tax demand of Rs. 61,44,148/-have been included in the gross value covered by appeal No. ST/92 of 2008 so that there shall not be over lapping of demand. If the appellant fails to satisfy the authority, consequence as that shall be proper under law shall follow. 3. In view of aforesaid observations, we remand this matter to the learned Adjudica....
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.... 13-12-2014 have raised a plea that the services rendered by them were classifiable under "Works Contract" service as brought into tax net from 01-6-2007 and therefore the impugned services were not taxable prior thereto. The plea is misplaced and not tenable in view of the fact that "Works Contract" service was brought into the tax net wef 01-06-2007 as also stated by the Noticee themselves. In the impugned proceedings against the Noticee the period involved i.e 08-7-2005 to 07-8-2006 in respect of the first Show Cause Notice dt.29-8-2006 and half yearly periods ended March' 2006 and September' 2006 in respect of the second Show Cause Notice dt.18-1-2008. As regards classification of services rendered by the Noticee during the material period, detailed discussions as at para 12.6 supra have brought home the fact that the impugned services were classifiable under "Site Formation" service." 12. In regard to the issue as to whether the appellant has correctly availed the CENVAT credit facility, the Commissioner observed as follows : "17. The aspect of admissibility of Cenvat Credit to the Noticee has been dealt with at length in the earlier adjudication proceedings. Howe....
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....ilding Systems Pvt. Ltd. vs Deputy Commissioner of Commercial Taxes 2022 (63) GSTL 257 (SC). 15. Learned counsel also contended that the CENVAT credit could not have been denied to the appellant merely on a technical ground that the invoices were issued in the name of other offices of the appellant. Learned counsel also submitted that penalty could not have been imposed on the appellant. 16. Shri Prashant Kumar, learned authorized representative appearing for the Department, however, supported the impugned order and submitted that it does not call for any interference in this appeal. Learned authorized representative, elaborating his submissions, contended that from a bare perusal of the work order it is more than apparent that the nature of work performed by the appellant would fall under the category of "site formation' service and that the Commissioner was justified in holding that the appellant could not have taken CENVAT credit. 17. We have considered the submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the Department. 18. The resolution of dispute in the present appeal would depend upon the nature of wor....
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.... 9,593,280 3. 102(b) Earth work in excavation for leveling and grading beyond 2m & upto 4m depth below ground level in all types of soil including laterite, moorum, ash etc. which can be excavated by means of crow bar, pick axe etc. but does not require chiseling or (and) blasting including setting out, dressing the sides, leveling to grade and ramming/compacting the bottom, leveling, approaches, stacking/disposal of surplus excavated material within a lead of 1km etc. complete as per specification, drawing and as directed by the engineer. 548,775 4. 103 Disposal of surplus excavated earth beyond an initial lead of 1km and upto a lead of 5 km including leveling the disposal material etc. all complete as per specification and as directed by the engineer. 45,000 5. 105 Earth work in filling for leveling and grading using selected excavated earth (obtained from compulsory excavations inside the project site) on prepared surface obtained by compacting with mechanical means including setting out, filling in horizontal layers not exceeding 250mm in compacted thickness, spreading, sorting, brea....
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....rposes; or (ii) soil stabilization; or (iii) horizontal drilling for the passage of cables or drain pipes; or (iv) land reclamation work; or (v) contaminated top soil stripping work; or (vi) demolition and wrecking of building, structure or road, but does not include such services provided in relation to agriculture, irrigation, watershed development and drilling, digging, repairing, renovating or restoring of water sources or water bodies;]" 22. The Supreme Court in Larsen & Toubro in paragraph 24 drew a distinction between the service contracts simpliciter and a composite works contracts which would involve both services and goods and held that it is only w.e.f. June 01, 2007 that composite contracts can be subjected to levy of service tax and not before this date. The relevant portions of the judgment are reproduced below : "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 servic....
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....s. It is this scheme and this scheme alone which complies with constitutional requirements in that it bifurcates a composite indivisible works contract and takes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax. 40. Finally, in para 31, the Delhi High Court holds :- "The contention of the petitioners that the impugned notifications override the statutory provisions contained in Section 65(105), which defines the term "taxable service", Section 66, which it is claimed is a charging section, and Section 67, the valuation provisions of the Finance Act, 1994, has to be rejected. We have, as already stated above, rejected the argument of the petitioners on bifurcation/vivisect and held that as per the provisions of Section 65(105)(zzq) and (zzzh), service tax is payable and chargeable on the service element of the contract for construction of industrial and commercial complexes and contract for construction of complexes as specified and in case of a composite contract, the service element should be bifurcated and ascertained and then taxed. The contention that the petitioners are paying sa....
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.... the rival contentions of the parties, it is also necessary to examine the issue of levying service tax on contracts said to be in the nature of works contract, both prior to, and following the introduction of an express charging provision to impose tax on works contract although we are concerned with the period prior to the definition of works contract w.e.f. 1st June, 2007 to Finance Act, 1994. This is with reference to the following judgments : (a) xxxxxxxx xxxxxxxx xxxxxxxx (b) xxxxxxxx xxxxxxxx xxxxxxxx (c) xxxxxxxx xxxxxxxx xxxxxxxx (d) xxxxxxxx xxxxxxxx xxxxxxxx (e) xxxxxxxx xxxxxxxx xxxxxxxx (f) Thus, Works Contract Services were brought under the service tax net as per an amendment to of the Finance Act, 1994 by introduction of Clause (zzzza) to Section 65(105). The said introduction was made pursuant to the Finance Act, 2007, which expressly made the service component in such works contract liable to service tax w.e.f. 1st June, 2007. The amendment was made to the said section of the Finance Act, 1994 by which works contract which were indivisible and composite could be split so that only the labour and service element of such contracts would be taxed as servi....
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....e discussion, I agree with the result arrived at by His Lordship M.R. Shah J. vis-a-vis allowing all civil appeals under consideration except Civil Appeal No. 6792 of 2010 which is dismissed. No costs." 24. It has been found as a fact that the work order in the present case, involves both supply of services as also goods. It is, therefore, a composite contract. In view of the decisions of the Supreme Court in Larsen & Toubro and Total Environment Building Systems it has to be held that the services performed by the appellant under the work order would fall in the category of "works contract' service and not "site formation' service. The finding of the Commissioner on this issue, therefore, cannot be sustained and is set aside. 25. The next issue that arises for consideration in this appeal is as to whether the appellant would be justified in availing CENVAT credit. 26. A provider of taxable service shall be allowed to take CENVAT credit under rule 3 of the CENVAT Credit Rules, 2004 the 2004 Rules on the service tax leviable under section 66 of the Finance Act. The relevant portion of rule 3(l) of the 2004 Rules is reproduced below: "3. (l) A manufacturer or producer of final p....