AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 276
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....into a contract dated 30.07.2007 with M/s. TOSCOTEC S.p.A., Italy for supply and erection of New Tissue Paper Plant at Amlai. The value of contract was 69,50,000 Euro (Rs.44,79,27,500/-). The department alleged that the activity rendered by the appellant is covered under category of Works Contract Service. The taxable value is calculated at Rs.24,91,53,131/-. It is alleged that the service tax on the said value for the period from July 2007 to December 2008 has not been paid nor even the returns have been filed by the appellant. Accordingly, vide Show Cause Notice No. 97/2013 dated 22.10.2013, service tax of Rs.3,07,95,328/- (inclusive of Education Cess and Higher Education Cess) is proposed to have been recovered from the appellant along with the proportionate interest and the appropriate penalties. The service tax of Rs.48,99,102/- as has already been paid by the appellant is proposed to have been appropriated against the confirmed demand. The said proposal has been confirmed vide the impugned Order-in-Orginal/Order under challenge. Being aggrieved, the appellant is before this Tribunal. 2. We have heard Shri Ayush A. Mehrotra and Shri Upkar Agarwal, learned Advocates for the ap....
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....he following decisions: (i) Indian Petrochem Corporation Ltd. Vs. Collector of C. Ex., reported as 2000 (125) ELT 1048 (Tribunal) (ii) Commissioner Vs. Indian Petrochem Corporation Ltd. reported as 2006 (198) ELT A127 (SC) (iii) Padmini Products Vs. CCE reported as 1989 (43) ELT 195 (SC) (iv) Cambay Organics Pvt. Ltd. Vs. Commr of C.Ex. reported as 2007 (ELT) 586 (Tri.-Ahmd.) With these submissions, order under challenge is prayed to be set aside and appeal is prayed to be allowed. 4. While rebutting these submissions, learned Authorized Representative has submitted that the demand in the present case has been confirmed after examining the various clauses of the contract. It has rightly been concluded that the erection and commissioning has been done by the appellant but through the sub-contractor, hence, there is no infirmity in including the payments made to the sub-contractors in the taxable value. Rule 2A of the Valuation Rules is mentioned to have been rightly invoked. Learned Departmental Representative has relied upon the decision of Larger Bench of this Tribunal in the case of Commissioner of Service Tax, New Delhi Vs. Melange Developers Private Limited reported a....
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....iable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out,- (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe 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; 6.2 From the above definition, it becomes clear that when one single contract talks about transfer of property in goods and for rend....
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....mployees of the appellant for the upkeep and maintenance of the plant supplied by them. Hence, to our opinion, the activity of the appellant is an act "for the purposes of carrying out erection, commissioning or installation" of the tissue paper plant which is manufactured by TOSCOTEC, Italy and is supplied by TOSCOTEC itself to the appellant along with all such services of getting the same properly erected and installed and commissioned. In light of this observation, the mere fact that the erection, installation, commission and construction of civil structure for the purpose has got done from other Indian companies is irrelevant for the purpose. The act of supervising the erection, commissioning and installation is held to be an act "for the purposes of carrying out erection, commissioning and installation." 6.5 From the contract, we also observe that the contract is a composite contract of supply and services as the price of goods has not been separately mentioned than the price of services. The contract price is the CISF price of goods at the rate of 69,50,000 Euros (Rs.44,79,27,500). This price is mentioned to have included the price of services, freight price, price of insura....
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....of goods and that of services, it is also held to be a Works Contract Service. Hence the charges paid by the appellant to various contractors as mentioned in Annexure - A to the show cause notice are held includable in the gross value of the impugned contract between appellant and TOSCOTEC, Italy. Hence, we do not find any infirmity neither in the show cause notice nor in the order under challenge where the service tax liability upon the total value of contract including the cost paid to the contractors for erection, commissioning and that the liability of appellant is being included in the amount/value for rendering Works Contract Service. 7.3 The said liability has been computed for an amount of Rs.3,07,95,328/- which has been confirmed. However, we observe that the adjudicating authority has failed to appreciate that appellant had already paid an amount of Rs.48,99,102/- on 17.12.2008 itself on account of Works Contract Services. This fact has been recorded in the show cause notice Para 4 thereof also. The adjudicating authority has also failed to take into consideration the service tax paid by the appellants vis-à-vis invoices raised by the various contractors. The amou....