TaxTMI 
TaxTMI 
2024 (12) TMI 1143
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.... appellants, was recorded; 101 it appeared that the appellant had undertaken the construction of 22 projects / works of various departments, civic authorities / agencies etc on the basis of tenders awarded, during 10.09.2004 to 31.03.2010; out of 22 projects, 14 were non-commercial and were, therefore, not liable to service tax; out of the remaining 8 projects, appellants paid Service Tax of Rs. 1,82,75,425on the 5 projects, for a taxable value of Rs. 16,60,09,504 (after abatement of 67% on gross amount of Rs.50,30,59,103); appellants did not discharge the service tax liability of Rs.88,25,187/- against the 3 projects/works namely Construction of 1 to 120 No. LIG Flats at Mall Mandi Scheme at Amritsar, Construction of Zonal Office Building of Punjab National Bank, Ferozepur Road, Ludhiana and Construction of Double Storeyed Shopping Complex in Mall Mandi, Amritsar on the taxable value of Rs.7,44,03,462/- (after abatement of @ 67% on gross amount received, i.e. Rs.22,54,65,037). A show cause notice dated 21.04.2011 was issued to the appellants alleging short payment of service tax amounting to Rs.88,25,187, invoking extended period of limitation under section 73(1) of the Act,....
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....posed penalty of Rs.200/- per day under Section 77 of the Act and imposed penalty of Rs.51,02,914/- under Section 78 of the Act. 4.2. The adjudicating authority dropped the proceedings, in respect of show cause notice dated 23.12.2012, holding that the demand of Rs.3,59,72,059/- is not sustainable on merits and that the remaining demand Rs. 17,71,72,143/- is hit by limitation; observed that as per settled legal position, extended period of limitation was not invokable in the subsequent show cause as held in Nizam Sugar Factory VS CCE, AP [2006 (197) ELT465(SC)];period of 2007-08 to 2009- 10 overlapped in both the notices. 4.3. The appellant is in appeal (ST/51022/2015) against the amount confirmed by the adjudicating authority in respect of two projects namely construction of 1 to 120 No. LIG Flats at Mall Mandi Scheme at Amritsar and Construction of Double Storeyed Shopping Complex in Mall Mandi, Amritsar as proposed in the first Show Cause Notice dated 21.04.2011. Revenue is in appeal (ST/51698/2015) against the dropping of second Show Cause Notice dated 23.12.2012. 5. Shri K.K. Anand, learned counsel for the appellants assisted by Shri A.K. Prasad, argued at lengt....
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....urts during the relevant period that if the main contractor paid the service tax, the same cannot be demanded again from the sub-contractor. He relies on Jaipuria Infrastructure Developers Pvt. Ltd. - 2014 (36) STR 696 (Tri.) and Urvi Construction- 2010 (17) STR 302 (Tri. Ahmd.). He submits, without prejudice to the above, that out of the 03 projects for which duty was confirmed, 02 projects relate to Amritsar Improvement Trust and are not related to any commerce or industry; as clarified by CBEC vide Circular No.80/2004-ST dated 17.09.2004, no service tax is payable. 7. Coming to the second show cause notice, the dropping of which caused the departmental appeal, learned counsel submits that it was wrongly stated that out of 28 projects undertaken by the appellants, 10 projects were not covered in the first show cause notice dated 21.04.2011; in fact, only 07 were not covered; the data relied upon for the second show cause notice is balance sheets, ledgers and other financial records produced by the appellants to the audit officers and therefore, suppression cannot be alleged. He submits that the adjudicating authority has correctly followed the decision of the Hon'ble Apex ....
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....on the Revenue; in case of ambiguity in taxing statute imposing tax liability, benefit of doubt is to be given to the assessee. Learned counsel also submits that in respect of second show cause notice entire 2010-11 is time barred; abatement of 67% has been wrongly denied for the years 2007-08 to 2010-11; Adjudicating Authority held certain services to be not taxable in the first show cause notice, Revenue cannot contend the same to be taxable in the second show cause notice; all the 10 cases referred to in the departmental appeal relate to infrastructure projects and as such cannot be considered as "Commercial or Industrial Construction Service"; the appellants are eligible for Composition Scheme as per Rule 2A of the Service Tax (Determination of Value) Rules, 2006or alternatively the benefit of Notification No.01/2006 dated 01.03.2006. He submits that the Committee of Chief Commissioners while reviewing the impugned order Section 35E of the Central Excise Act, 1944 are required to examine all the records of the proceedings; written replies of the appellant and the Chartered Accountant certificate are part of the proceedings; the Committee appears to have not examine them as ther....
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....rized Representative submits that SCN dated 21.04.2011 covered the period 09/2004 to 31.03.2010 and the second SCN dated 23.10.2011 covered the period 2007-08 to 201112; the period 01.04.2010 to 31.03.2012 was not covered in the first SCN; for the period October 2010 to March 2011, the extended period of limitation could be construed to have been evoked at all in subsequent SCNs dated 23.10.2011; the same is within normal time; the Adjudicating Authority erred in dropping the demand for this normal period; out of the 28 projects, 10 projects were not part of this Show Cause Notice dated 21.04.2011; the Adjudicating Authority wrongly relied upon the case of Nizam Sugar Factory (supra) and failed to take cognizance of the decision of the Tribunal in the case of M.M Cylinders (P) Ltd. - 2012 (277) ELT 78 (Tri. Bang.); the same was upheld by the Hon'ble Supreme Court - 2014 (302) ELT A28 (SC) saying that Show Cause Notice issued for subsequent period not based on identical facts or evidences as in the case of first Show Cause Notice; he relies on the decision of the Hon'ble Gujarat High Court in the case of Neminath Fabrics Pvt. Ltd. - 2010 (256) ELT 369 (Guj.) 12. Heard both si....
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....ed to service tax. 13.3. In case of multi-purpose buildings such as residential-cum-commercial construction, tax would be leviable in case such immovable property is treated as a commercial property under the local/municipal laws. 13.4. The definition of service specifically excludes construction of roads, airports, railway, transport terminals, bridge, tunnel, long distance pipelines and dams. In this regard it is clarified that any pipeline other than those running within an industrial and commercial establishment such as a factory, refinery and similar industrial establishments are long distance pipelines. Thus, construction of pipeline running within such an industrial and commercial establishment is within the scope of the levy. 13.5. The gross value charged by the building contractors include the material cost, namely, the cost of cement, steel, fittings and fixtures, tiles etc. Under the Cenvat Credit Rules, 2004, the service provider can take credit of excise duty paid on such inputs. However, it has been pointed out that these materials are normally procured from the market and are not covered under the duty paying documents. Further, a general exemption is available....
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.... distinct from contracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. In Gannon Dunkerley, 1959 SCR 379, this Court recognized works contracts as a separate species of contract as follows:- "To avoid misconception, it must be stated that the above conclusion has reference to works contracts, which are entire and indivisible, as the contracts of the respondents have been held by the learned Judges of the Court below to be. The several forms which such kinds of contracts can assume are set out in Hudson on Building Contracts, at p. 165. It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration, and the other for payment of remuneration for services and for work done. In such a case, there are really two agreements, though there is a single instrument embodying them, and the power of the State to separate the agreement to sell, from the agreement to do work and render service and to impose a tax thereon cannot be questioned, and will stand untouched by the present judgment." (at page 427) 18. Similarly, in Kone Elevator India (P....
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...., AIR 1958 SC 560 : 1959 SCR 379]. Seen thus, even if in a contract, besides the obligations of supply of goods and materials and performance of labour and services, some additional obligations are imposed, such contract does not cease to be works contract. The additional obligations in the contract would not alter the nature of contract so long as the contract provides for a contract for works and satisfies the primary description of works contract. Once the characteristics or elements of works contract are satisfied in a contract then irrespective of additional obligations, such contract would be covered by the term "works contract". Nothing in Article 366(29-A)(b) limits the term "works contract" to contract for labour and service only. The learned Advocate General for Maharashtra was right in his submission that the term "works contract" cannot be confined to a contract to provide labour and services but is a contract for undertaking or bringing into existence some "works". We are also in agreement with the submission of Mr. K.N. Bhat that the term "works contract" in Article 366(29-A)(b) takes within its fold all genre of works contract and is not restricted to one specie of c....
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.... not provide at what rate it would be taxable. One cannot determine the rateable value of the small property by aggregating and adding the value of other properties, and arrive at a figure which is more than possibly the value of the property itself. Moreover, what rate of tax is to be applied to such a property is also not indicated." (at paras 12 and 16) 22. Equally, this Court in Govind Saran Ganga Saran v. CST, 1985 Supp SCC 205, held :- "The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity." (at para 6) 23. To similar effe....
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....tation is pressed on the charging provision. That pertains to the fundamental integrality of the statutory scheme provided for each head." (at para 10) 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 simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-se....
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....wed deduction for an amount of Rs.31,24,399/- on account of service tax paid by the implementing agency i.e. M/s Engineering Projects (India) Ltd., in respect of construction of office building of Punjab National Bank, Ludhiana; the project pertains to the year 2006-07 which was even beyond the period of five years; Commissioner correctly relied on the judgment of the Tribunal/ Courts during the relevant period that if the main contractor paid the service tax, the same cannot be demanded again from the subcontractor. He relies on Jaipuria Infrastructure Developers Pvt. Ltd. - 2014 (36) STR 696 (Tri.) and Urvi Construction- 2010 (17) STR 302 (Tri. Ahmd.). He submits, without prejudice to the above, that out of the 03 projects for which duty was confirmed, 02 projects relate to Amritsar Improvement Trust and are not related to any commerce or industry; as clarified by CBEC vide Circular No.80/2004-ST dated 17.09.2004, no service tax is payable. In view of the above, we find that demand of Rs.51,02,914/- confirmed against the appellants in respect of Show Cause Notice dated 21.04.2011 for the period 10.09.2004 to 31.03.2010 is not sustainable. Appeal No. ST/51022/2015 is liable to be ....