TaxTMI 
TaxTMI 
2024 (5) TMI 1575
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....nterior Decorator Service, and (iv) Construction of Residential Complex Service There are 8 appeals filed by the assessee i.e. M/s RPP and 4 departmental appeals being disposed off through this common order. The demands have been raised under 9 categories of services against which both RPP and the department are in appeal before this Tribunal. Since a large number of individual projects are involved in all the appeals put together, its proposed to group the projects service wise for ease of discussion and decision on the legal issues involved. 2. The index of issues discussed is given in the table below. Sl No Subject Para No Page No 1. Chronological dates and events pertaining to statutory provisions/ notifications 3.1 3 2. Chronological dates of important Judgements. 3.2 7 3. Legal position 4 8 4. Dredging 7 13 5. Works Contract/ Civil Supplies/ Residential Complex Construction/ Erection and Commission/ Commercial Construction Service 8 to 14 18 5a Service rendered was composite works contract and not liable to tax under any other classification heading 14.I 35 5b Service provided only to Government, a local authority or a governmental authority ....
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....ged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. 16.06.2005 Service Tax levied on "Construction of complex service" Sec. 65 (105) (zzzh) Taxable service means any service provided or to be provided to any person by any other person in relation to construction of complex. Sec. 65 (30a) "construction of complex" means - (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex. Sec. 65 (91a) "residential complex" means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of faciliti....
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....al 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. 01.06.2007 Rule 2 A introduced in Service Tax (Determination of Value) Rules, 2000 to prescribe mechanism for valuation of service portion of works contract Notification 29/2007 Service Tax Dt. 22.05.2007 01.06.2007 Optional Composition scheme introduced for payment of Service Tax on Works Contracts, prescribing Service Tax rate of 2 % on gross amount Works Contracts (Composition scheme for payment of Service Tax) Rules, 2007. Notification 32/2007 Service Tax Dt. 22.05.2007 04.01.2008 CBIC clarified that if tax was paid under CICS or CCS before 01.06.2007, such service shall continue to be classified under CICS or CCS and the benefit of composition scheme is not applicable. CBIC Circular No. 98/1/2008 Dt. 04.01.2008 A service provider who paid service tax prior to 01.06.07 for the taxable service, namely, erection, commissioning or installation service, commercial or industrial construction serv....
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....t of a particular works contract. Once such an option is made, it is applicable for the entire contract and cannot be altered. Therefore, in case a contract where the provision of service commenced prior to 01.06.2007 and any payment of service tax was made under the respective taxable service before 01.06.2007, the said condition under rule 3(3) was not satisfied and thus no portion of that contract would be eligible for composition scheme. On the other hand, even if the provision of service commenced before 01.06.2007 but no payment of service tax was made till the taxpayer opted for the composition scheme after its coming into effect from 01.06.2007, such contracts would be eligible for opting of the composition scheme. 20.06.2012 Service Tax Mega Exemption Notification No. 25/2012 dated 20/06/2012, later amended by Notification dated 30/01/2014 Clause 2(s) ""governmental authority" means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution." ....
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....015 Settled the law that composite works contracts involving services and goods covered under Section 65(105)(zzzza) are liable to tax only with effect from 1st June, 2007. Service contracts prior to 01/06/2007, would cover only pure service contracts. 4 Suresh Kumar Bhansal Vs UOI-2016 (43) STR 3 Del. Decided on 03/06/2016 by Hon'ble Delhi High Court Explanations added in CICS and CCS from 01.07.2010 struck down, in the absence of statutory mechanism to determine the value of service. 5 Bhayana Builders Pvt. Ltd. Vs CST. Decision of the Larger Bench of the Tribunal Dated 06.09.2013. Upheld by the Hon'ble SC on 19/02/2018 (L & T decision is also noted by SC) While claiming abatement of 67% whether the value of materials supplied by customer also should be included or not. Held in favour of assesses, that the same is not includible. 6 Realvalue Promoters Pvt. Ltd. Vs CCE, Chennai CESTAT. Decided on 18/09/2018 L & T Followed. Even after 01.06.2007, Service Tax on composite contracts can be levied only under WCS and demands under CICS and CCS set aside. 7 Total Environment Building Systems Pvt. Ltd. Vs Deputy Commissioner of Commercial Taxes [2022 (63) G.S.T.L. 257 (S.C.)]....
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....e contracts simpliciter is used to describe pure service contracts where the focus is solely on the provision of services i.e. services provided without any associated supply of goods or other complexities. There was no charging section to tax 'works contract' in the Finance Act, 1994 (FA 1994) i.e. until the amendment made with the insertion of subclause (zzzza) to clause 105 of Section 65 of the FA1994 on 01.06.2007. III) Pure construction services, where all materials etc. required for the construction are supplied by the service recipient and the service provider is engaged only for provision of construction service (not composite involving supply of goods) and are not in the nature of works contract are liable to service tax, prior to 1.6.2007. IV) The Hon'ble Apex Court in L&T Kerala (supra) held that any charge to tax under the five heads in Section 65(105) would only be of service contracts simpliciter and not composite indivisible works contract. Those five heads are: (g) to a client, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering but not in the discipline of computer hardwar....
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....t leviable. Service tax was imposed on all services other than those specified in the negative list. VII) Classification of services is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify a service under a particular category different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. The judgments of the Hon'ble Supreme Court in Union of India v. Garware Nylons Ltd. [1996 10 SCC 413]; H.P.L Chemicals vs. Commissioner of Central Excise, [2006 (197) E.L.T. 324 (S.C.)]; Puma Ayruvedic Herbal (P) Ltd. v. Commissioner of C. Ex., Nagpur [2006 (196) E.L.T. 3 (S.C.)], which declare the law although rendered in the case of classification under the Central Excise Act are also relevant for classification of a service under the FA 1994. VIII) It is now an accepted legal position, flowing from the above principle that if the burden of proving the alternate classification as proposed by the Revenue is not satisfactorily discharged, then even if the classification made by the assessee is wrong, it will remain undisturbed. [See Pepsico Holdings Pvt. Ltd. ....
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....ed. The issues are categorised and discussed under the following heads: a. Dredging Service b. Works Contract Service (WCS) c. Civil Supplies d. Residential Construction Service (RCS) e. Erection and Commissioning and Installation Service (ECIS) f. Commercial Construction Service (CCS) g. SEZ h. Interior Design Services i. Site Formation Service 5.1 Since we are dealing with many contracts covered by the impugned orders, it would be relevant to refer to the Apex Courts judgment in DLF Universal Ltd. & Anr. v. Director, Town and Country Planning Department, Haryana & Ors., [(2010) 14 SCC 1] which explains the interpretation of the contract thus: Interpretation of contract 13. It is a settled principle in law that a contract is interpreted according to its purpose. The purpose of a contract is the interests, objectives, values, policy that the contract is designed to actualize. It comprises the joint intent of the parties. Every such contract expresses the autonomy of the contractual parties' private will. It creates reasonable, legally protected expectations between the parties and reliance on its results. Consistent with the character of purposive interpretat....
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.... dictionaries as the definition covers the activities as well as areas of application. Services have been rendered at Panavanar river, Kollidam river, Vadavar river, Manimuthar river and Buckingham Canal. The Canal is nothing but a man-made river, which was once used to carry timber and other merchandise to different destinations. Thus, areas of application are not different from those enumerated in the definition. Revenue relies on the decision of Hon'ble CESTAT, Kolkata Bench rendered in the context of MacIntosh Burn vs Commissioner of Service Tax, Kolkata [2010 (19) S.T.R. 682 (Tri. - Kolkata)]. [RPP in their written submissions have made a reference to OIO. No. 5/2014-ST as a part of the order appealed against under this service heading. On verification with them they have stated that the inclusion of the said order, was wrongly shown in place of OIO. No. 11/2013-ST]. 7.2 Submissions by RPP: The Appellant has submitted that the period of dispute is from 01.10.2010 to 30.06.2012 and the Total Service Tax Demand is Rs. 5,28,51,575/-. The period is thus prior to the introduction of the 'Negative List' in Service Tax law, from 1.07.2012. Further the nature of work undertaken ....
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....aying of foundation, placing cement, and erecting a horizontal and vertical cement concrete retaining wall. It did not involve any removal or excavation of material from the bottom of a water body using specialised dredger machinery. The intention of the contracting parties was not the dredging of the river. B) The South Buckingham Canal contract involves improvements to canals and construction of arterial drains and construction of stormwater drains [feeder and collector]. They pertain to efficient drainage of rain water into the canal and the intention is not one of deepening or dredging the canal for navigation. These activities undertaken on land outside the canal is in order to ensure absence of stagnation or flooding in Chennai city and not for dredging. C) The agreement relating to Contour Canal provides details of the work that are expected to be carried out by the contractor - clearing jungle, dismantling brick and stone masonry, earthwork, concrete reinforcement, steel fabrication and random rubble masonry. None of these activities fall within the ambit of dredging. D) The agreement for the work relate to standardising, strengthening, and permanent protection to the....
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....a statute applicable to the facts and circumstances of the individual case. From the above description it is seen that the service tax recipients were seeking the services of RPP for construction of drainage canals and bunds on the bank of water bodies as a flood protection measure; for construction of permanent flood protection works; clearing scrub jungle and levelling the site; improvements to canals and construction of arterial drains and construction of stormwater drains. The removal of any material including silt, sediments, rocks, etc was incidental to the main activity. In MacIntosh Burn vs Commissioner of Service Tax, Kolkata [2010 (19) S.T.R. 682 (Tri. - Kolkata)], the matter related to the scope of work awarded through tender by the Irrigation Department of the West Bengal Government for dredging of river Ichhamati. The matter is hence distinguished. A Coordinate Bench of this Tribunal in its judgment in Ramalingam constructions v. Commissioner, reported in 2018 (7) TMI 620-CESTAT Chennai, had a more comprehensive look at the service and stated as under; 9.5 The combined take away from these definitions and etymology is that dredging an activity that involves clearing,....
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..... MMIS-MRPL OIO. No. 07/2017- ST OIA.No. 47/2017- ST 9. KPTCL (KTSS) OIO. No. 02/2017-ST 10. Anna Universtiy (Tuticorin) OIO. No. 02/2017-ST 9.1 Submissions by Revenue: (i) Project 'CMDA' is for construction of parking yards for trucks as a facilitation measure used for commercial purposes and fees for parking are charged. Though CMDA is a statutory authority, the impugned function is not a sovereign function. (ii) Project 'MVM' is for construction of godowns and shops for storage/selling of vegetables and other perishable commodities. The project is intended for commerce and business. The subject tax demand is, therefore, legal and proper. (iii) Project 'SPH' is for expansion of circulation of water system and fire protection system at Neyveli Lignite Corporation Ltd. a PSU, engaged in commercial activity. It is not a government authority. Besides, RPP has carried out the activity as a sub-contractor to the main contractor; accordingly, they cannot escape the tax liability. (iv) Coming to the project titled 'SIPCOT Perundurai', the work involved was construction of a sump for water supply to the factories, providing external lighting arrangement, open well submers....
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..../10/2023] in support of their stand. 10. CIVIL SUPPLIES (WORKS CONTRACT) S.No Name of the Project Order in original Period and duty amount involved 1. ALCS OIO. No. 02/2017-ST The period of dispute is from 01.04.2014 to 30.06.2015 i.e. prior to the introduction of 'Negative List', but after the Mega Service Tax Exemption Notification No. 25/2012 dated 20/06/2012, came into force. The Total Service Tax Demand is Rs. 4,20,17,115/-. 2. ARCS 3. CCS 4. DCS 5. KCS 6. KKCS 7. MCS 8. NCS 9. SCS 10. PCS 11. TCCS 10.1 Submissions by Revenue: The scope of the work in these projects involves construction of scientific storage godowns for storage of essential commodities for public distribution system. The impugned order has held that Tamil Nadu Civil Supplies Corporation (TNCSC) is engaged in commercial activity and runs on profit motive and therefore the exemption claimed under Sl. No. 12 of the Mega Notification 25/2012 cannot be extended. 10.2 Submissions by RPP: The period of dispute is from 01.04.2014 to 30.06.2015 i.e. prior to the introduction of 'Negative List', but after the Mega Service Tax Exemption Notification No. 25/2012 dated 20/06/2012, c....
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....) OIO. No. 11/2013-ST OIO. No. 19/2015- ST 4. Tsunami Reconstruction of Vulnerable houses OIO. No. 14/2013-ST OIO. No. 11/2013-ST OIO. No. 19/2015-ST OIO No. 17/2015- ST 5. PPH OIO. No. 06/2010-ST 6. APHS OIO. No. 06/2010-ST 7. APH/NPP/PPH/PHD OIO. No. 06/2010-ST 8. MTSS Madurai OIO. No. 11/2014- ST 11.1 Submissions by Revenue : The Adjudicating officer has stated that RPP a sub-contract is liable to pay service tax, as per Ministry's letter F. No. 323/16/2010 TRU dt 24.05.2010. Since RPP is a subcontractor for CPWD in executing the project they are liable to pay service tax. NTECL is a public sector company and not a Government organization they do not enjoy any specific exemption and therefore service tax was demanded after allowing 67% rebate. The Adjudicating officer stated that as a subcontractor the appellant constructed 1000 Houses in Northern Sri Lanka and received payment in Indian Rupee. In the absence of specific exemption notification and the clustered houses were constructed with simple compound, the services rendered falls under residential complex services. The judgment of the Apex Court rendered in the case of Larsen and Toubro [2015 (39) STR 913....
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....for the services were received in INR. RPP has acted as sub-contractor for Hindustan Pre-Fab Ltd. The period of dispute is 2011 to 2012 prior to the Negative List scheme. It has been claimed that the work was done as a Works Contract. RPP may be asked to produce evidence to substantiate this claim. (vi) Project -Tsunami Reconstruction: The scope of work is reconstruction of vulnerable houses under Tsunami Reconstruction scheme. Demands have been confirmed for want of specific exemption to cover the activity. This is applicable to 3 appeals. RPP have claimed that the services were provided under a WC and have been rendered to the Government but the period covered in some cases is prior to issue of Notification No. 25/2012. (vii) Project -PPH: The work done relates to construction of houses for Police Personnel as per contract with Police Housing Corporation Ltd. It is stated that the project was completed before October,2005 i.e. prior to the introduction of the levy on CRCS. But no proof was provided to substantiate this claim. Notwithstanding the same, Hon'ble Tribunal has decided in several cases that Service Tax is not charegeable on construction services provided to TNPHC L....
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.... Larsen & Tubro Ltd., Real Value Promotors and Jain Housing, held that service simpliciter only would be leviable to service tax under CICS/CCS/RCS service till the introduction of the negative list. 12. ERECTION AND COMMISSIONING S.No Name of the Project Order in original Period and duty amount involved 1. AM Agniyar,- PWD OIO. No. 11/2014-ST OIO. No. 14/2013-ST Period of dispute is from 2004-2009 and 01.04.2010 to 30.06.2015 i.e. prior to and after the introduction of 'Negative List' in Service Tax law, on 01.07.2012. Both periods. The Total Service Tax Demand is Rs. 3,51,75,678/-. 2. KPM, Canadian Work OIO. No. 14/2013-ST OIO. No. 11/2013-ST 3. PTPS- PALANI OIO. No. 14/2013-ST OIO. No. 11/2013-ST 4. CPS Cuddalore OIO. No. 11/2014-ST OIO. No. 14/2013-ST OIO. No. 11/2013-ST 5. Contour Canal Sarvesh OIO. No. 11/2013-ST OIO. No. 19/2015-ST 6. PTS- Pattukkottai OIO. No. 14/2013-ST OIO. No. 11/2013-ST 7. KPM, Dindugal OIO. No. 06/2010-ST 8. TCC Canal Work OIO. No. 11/2013-ST OIO. No. 19/2015- ST 9. KTSS (Power Project Work) OIO. No. 11/2013-ST 10. TWAD Lakka OIO. No. 11/2013 11. MRTS-SR OIO. No. 06/2010 12. KTC OIO. No. 06....
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.... RPP is required to pay the tax demanded. It may also be noted that the AA has accepted the claim of RPP wherever full justification was provided. 12.2 RPP's submissions: Period of dispute is from 2004-2009 and 01.04.2010 to 30.06.2015 i.e. prior to and after the 'Negative List' in Service Tax law, from 1.07.2012. The Total Service Tax Demand is Rs. 3,51,75,678/-. These activities carried out by M/s RPP fit within Works Contract Service as defined in section 65(105)(zzzza) of the FA 1994, as the statute has intentionally integrated erection and commissioning service, commercial or industrial construction service, construction of complex service, and turnkey projects (including EPC projects) into the definition of Works Contract Service. Further, M/s RPP are rendering services to the governmental authority who is performing functions enshrined under Article 243W of the Constitution of India read with the 12th schedule. Therefore, the same is exempt under Clause 14(d) of the Mega Exemption Notification No. 25/2012. In this regard reliance is placed on the latest decision of the Hon'ble Supreme Court in the case of M/S Shapoorji Pallonji And Company. With regard to construction ....
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....OIO. No. 11/2013 OIO. No. 14/2013 OIO. No. 11/2013 OIO. No. 19/2015 9. SIPCOT, Perundurai, OIO. No. 06/2010 OIO. No. 14/2013 10. SSE, OIO. No. 14/2013 OIO. No. 11/2013 11. M P Garden, OIO. No. 11/2013 12. PWD, Salem (Periyar University), OIO. No. 11/2013 13. UMS, OIO. No. 11/2014 OIO. No. 11/2013 OIO. No. 19/2015 14. URC, OIO. No. 11/2013 15. Tec Educ Tuticorin (College building at Tuticorin), OIO. No. 11/2013 OIO. No. 19/2015 16. KSR, OIO. No. 06/2010 17. AMPA, OIO. No. 06/2010 18. CHP, OIO. No. 06/2010 19. Neyveli Bridge & Road, OIO. No. 06/2010 20. VPR, OIO. No. 06/2010 21. Thermax, OIO. No. 11/2013 22. SPAC OIO. No. 11/2013 OIO. No. 19/2015 13.1 Submissions by Revenue: (i) Indoor Stadium at Mahe (Puduchery): The AA has held that the indoor stadium is given on rent to host public functions, organizing major events, entertainment programmes etc., thereby generating income. The SCN /OIO has classified the services under CICS. (ii) DCW: This project is covered in 3 Appeals and spans the period from 2004 to 2009. The OIO has confirmed the tax liability on the ground that the sub-contractor was liable to S tax in terms of CBEC c....
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....involved is construction of additional building for National Institute of Unani Medicine, Bangalore. This is a premier institute for teaching Unani Medicine set up by the Union Ministry for Health. For the earlier period the demand was dropped vide Order No. 6/2010. An appeal has been filed against this decision. (xiv) URC: This relates to small value construction work done to URC. Amount of S tax has been paid. Plea is for waiver of penalty, which may be considered. (xv) Anna University, Tuticorin: Scope of work is construction of academic block for Anna University Engg. work, Tuticorin. The building is primarily for purposes other than commerce or business. For the earlier period the demand was dropped vide Order No. 6/2010. Though an appeal has been filed against this decision, the point made above require consideration. (xvi) KSR: This project involves construction of civil and structural work at Summer Indian Textile Mills Ltd. The work was appears to have begun before 1/6/2007 and in terms of rule 3(3) of 2007 Rules, and the decision in the case of Nagarjuna Construction Pvt. Ltd., their classification could not be changed to 'Works Contract' services. RPP stated that t....
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....aised under this particular head cumulatively for all the projects and appeals where this issue arises is Rs..3,10,77,895/-. The primary contention of the Appellant, M/s RPP is that the service is one of composite works contract and not commercial construction service. The department has also allowed abatement at 67% of the Gross Value for most projects. The language of Section 65(25b) was without any ambiguity and states that construction ipso facto is not leviable to service tax, but it is only so when used, or to be used, primarily for "commerce" or "industry" or work intended for "commerce" or "industry". On the definition of the term "commercial construction" and the stipulation that it must be "primarily" for commerce, RPP relies upon the decisions in CST v. SM Sai Construction [2016 (42) S.T.R. 716 (Tri. - Mumbai)], ECP Housing India Pvt Ltd v. CCE [2013 (30) S.T.R. 703 (Tri. - Mumbai)], and Central India Engineering Co v. CCE [2016 (44) S.T.R. 657 (Tri. - Mumbai)]. The legal issue that sub-contractor has to discharge liability even when the main contractor has discharged duty liability has been decided in favour of the Revenue by the Larger Bench in CST v. Melange Developer....
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....tract does not cease to be works contract. ii) Composite contracts falling under the taxable services of clause (105) of S.65 of the FA 1994, namely, 'Erection Commission and Installation Service' (sub-cl. zzd), 'Commercial or Industrial Construction Service' (sub-cl. zzq) and 'Construction or Complex Service' (sub-cl. zzzh) were clarified by the Board to be taxable under the stated service classifications, prior to the introduction of the Works Contract Service. 67 % abatement (exemption from value) was provided for such composite contracts vide Notification 15/2004 Service Tax Dt. 10.09.2004 etc. It was explained in Board's letter F. No. B2/8/2004-TRU dtd 10/09/2004 that in the case of a composite contract, bifurcation of value of goods sold is often difficult hence the abatement. This would, however, be subject to the condition that no credit of input goods, capital goods and no benefit under notification no. 12/2003-ST of exemption towards cost of goods are availed. iii) On the introduction of the 'Works Contract Service' under the Service Tax net on 01/06/2007, also came the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. It provided an option t....
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....and S. 67 would unequivocally show that what is referred to in Ch. V of FA 1994 is the taxability of the service contract simpliciter and not a composite works contract. 'Works Contract' is a separate species of contract distinct from contracts for services simpliciter. Hence pure construction services, where all materials etc required for the construction are supplied by the service recipient and the service provider is engaged only for provision of construction service (not composite involving supply of goods) which are not in the nature of works contract are liable to service tax, prior to 1.6.2007. There was no charging section to tax 'works contract' in the FA 1994 i.e. until the amendment made with the insertion of subclause (zzzza) to clause 105 of Section 65 of the FA 1994 on 01.06.2007. The argument of Revenue that the exemption notification providing for exemption of certain percentage of the contract value gave enough sanctity to the levy of tax on Composite Contracts was found illogical and irrelevant. The Hon'ble Court held that, "whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since,....
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....id that such judgment was contrary to cited case. II. Service provided only to Government, a local authority or a governmental authority and hence not taxable. i) The next major issue pertains to Service Tax Mega Exemption Notification No. 25/2012 dated 20/06/2012 as amended by Notification dated 30/01/2014, for having provided service to Government, a local authority or a governmental authority. The impugned period covers both the pre and post amendment periods of the said notification. Since the amendment is held to be clarificatory in nature it would apply to both the periods. ii) We find that the judgment of the Apex Court in Shapoorji Paloonji and Company (supra) cited by the appellant in their favour, centers around a common question: whether the educational institutions like IIT and NIT are covered by the definition of "governmental authority" under clause 2(s) in Mega Service Tax Exemption Notification No. 25/2012, G.S.R 467(E) dated 20/06/2012 as amended by Notification dated 30/01/2014. However, the judgement is important as it imparts finality to the interpretation of amending notification dated 30.01.2014. Clause 2(s) of the parent Exemption Notification defining ....
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.... If the author wanted both these parts to be read together, there is no plausible reason as to why it did not use the word "and" and without the punctuation semicolon. " v) As stated by the Apex Court, an amendment by way of the Clarification Notification was, therefore, introduced which expanded the definition of "governmental authority" and widened the exemption base for service tax to be provided even to an authority or a board or any other body, set up by an Act of Parliament or a State Legislature without the condition of having been established with 90% or more participation by way of equity or control by Government to carry out any function entrusted to a municipality under Article 243W of the Constitution. vi) Notification dated 30/01/2014 being clarificatory in nature would apply from the inception of clause 2 (S) of notification dated 20.06.2012. Hence to examine the exemption benefit it is necessary to ascertain the limb under which the recipient whether being an authority or a board or any other body, falls i.e. whether it is, (i) set up by an Act of Parliament or a State Legislature or (ii) established by Government, with 90% or more participation by way of equity ....
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....tly for use other than for commerce, industry, or any other business or profession' makes it clear that the beneficiary must ultimately have used the appellants service for a civil structure which is predominantly used other than for commerce, industry, or any other business or profession. If the use cannot be established by the appellant the exemption will not be eligible. However, the fact that the civil structure has secondary or incidental uses would not alter the nature of the contract so long as the primary use of the civil structure is not for commerce, industry, or any other business or profession. In clause 13(a) the phrase for use by general public is popularly understood as for the general use and equal enjoyment of the citizens who compose organized society. The appellant will have to establish that the object or aim which the project concerns itself was with the general interest of the community, as opposed to the particular interest of individuals or a restricted group of people. ix) In the case of Construction of scientific storage godown for TNCSC discussed at para 10 above [Civil Supplies (Works Contract)], RPP is eligible for the benefit of Notification No. 25/2....
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....lassification must fail till the introduction of the negative list regime with effect from 01/07/2012 as per Section 66D of the 1994 Act, inserted by the Finance Act, 2012. Similarly, the dispute on the provision of services to Government, a local authority or a governmental authority attained more clarity after the Supreme Court's judgment in Shapoorji Paloonji and Company (supra). The legal issue is obvious and trite that a subject is not taxable by inference or by analogy, but only by the plain words of a statute / notifications applicable to the facts and circumstances of the individual case. These issues were not directly addressed in the SCN and impugned orders. Since these judgments were not available to the Original Authority, nor did the Appellant who has to prove his eligibility for exemption, as stated in M/s Dilip Kumar and Company & Ors. (supra) approach the issue in the said light, the matter merits being remanded to the Original Authority for a fresh look and decision there on for the above issues listed in the Order-in-Original and mentioned at from paras 9, 11,12 & 13 above. While doing so projects in which the department has extended the benefit of abatement from ....
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....e case of Moser Baer Ltd. v) As for Mangalore Pipeline corridor, submissions made by RPP are reasonable and can be accepted. 15.2 RPP's Submissions Period of Dispute is 01.04.2010 to 30.06.2015 i.e. prior to 'Negative List' and the Total Service Tax Demand is Rs. 90,73,575/-. With regard to point (i) raised by the Revenue regarding "services rendered within and outside the SEZ" it is submitted that even if the services are rendered outside an SEZ, if the work related to SEZ, the exemption available for an SEZ unit is applicable, in view of the following decisions:- a. Vision Pro Event Management V. CCE & ST, Chennai reported in 2018 (7) TMI 334- Cestat Chennai b. GMR Aerospace Engineering Limited And Another Versus Union of India And Others reported in 2019 (31) G. S. T. L. 596 (A.P.) Without prejudice to the above, it is submitted that the courts have consistently held that as long as all substantial conditions for allowing exemption is satisfied, exemption cannot be denied for submission or non-submission of Forms. With regard to Vision Pro case not taking into consideration the amendment dated 15/5/2009, they submitted that the amendment vide Notification No. 15/20....
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....or the manner of availing the exemption when the services are consumed outside the SEZ. 15.3.1 All laws of India are applicable in SEZs unless specifically exempted as per the SEZ Act. We find that the SEZ Act is a self-contained Act where exemptions on taxes, duties, cess, drawbacks and concessions are provided on imports and exports of the goods and on supply of services to the Developers and SEZ units. Sections 7, 26 and 50 are the three main provisions of the SEZ Act which allow the SEZ Units to claim the exemptions on duties, tax, cess and certain drawbacks and concessions. The levy of Service Tax under the FA 1994 is subject to the overriding effect under Section 51 of the SEZ Act. Section 26(1)(e)of the SEZ Act provides exemption from Service Tax under Chapter V of the FA 1994 on taxable services provided to a Developer or Unit to carry on the authorised operations in a Special Economic Zone. The core area covered by the Act thus relates to the SEZ enclave. It would be relevant to state that as per the Apex Court's judgment in Peekay Re-Rolling Mills Pvt. Ltd. Vs Assistant Commissioner [2007 (219) E.L.T. 3 (S.C.)], exemption does not negate a levy of tax altogether. Despite....
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.... more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved." (emphasis added) The Apex Court had also observed in State of Madhya Pradesh v. Nandlal Jaiswal [1987 (1) SCR 01] that "in complex economic matters every decision is necessarily empiric, and it is based on experimentation" and that the court, while considering the validity of executive action relating to economic matters grant a certain measure of freedom or 'play in the joints' to the executive." Hence there is some force in the contention of Revenue that the discretion of Government to regulate the manner in which the tax exemption is availed cannot be held to be redundant. Regulation helps ensure that the exemption achieves its intended goal. It also ensures that no injury is caused to the trade in the domestic tariff area (DTA), due to inadvertence or by wrongful acts of the beneficiaries of the exemption in the SEZ enclave and is founded upon the fundamental principle of justice and good sense. The presumption in law is that Government makes policy for general good and does not seek to cause harm for one sect....
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....icature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in M/s GMR Aerospace Engineering Ltd Vs. Union of India [Writ Petition No. 13546 of 2018, Date:27-12-2018 / 2019 (31) GSTL 596 (AP)] examined the specific and larger question as to whether the availability of exemptions under Section 26 of the SEZ Act would depend not only upon the terms and conditions prescribed under Section 26 (2), but also upon the terms and conditions prescribed in the notifications issued under various enactments such as Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act, 1944, Central Excise Tariff Act, 1985, Finance Act, 1994 and Central Sales Tax Act, 1956 etc., enlisted in clauses (a) to (g) of sub-section (1) of Section 26 of the Act. The Hon'ble High Court held that the benefit of exemptions granted under the notifications issued under Section 93 of the Finance Act, 1994, are available to any one and not necessarily confined to a unit in a special economic zone. Section 93 of the Finance Act, in that sense is a general power of exemption available in respect of all taxable services. But Section 26 (1) is a special power of exemption under a special enactment dea....
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....ntext of the words preceding it, i.e. advise, consulting, technical assistance. The phrase "any other manner" cannot have an unlimited import to include any activity remotely related to beautification of spaces or landscape development, applying the ejusdem generis principle of interpretation. Furthermore, since abatement has been given in OIO, reference is drawn to real value promoters as discussed in detail supra. 16.3 Discussion: While any person involved in providing service related to planning, design or beautification of space whether man made or otherwise including a landscape designer will be covered under section 65 (59) of the Finance Act 1994, the actual work carried out has not been brought out in the SCN or the impugned order in detail for us to examine and come to a conclusion. The matter in both cases needs to be verified along with the contract / work order to understand the intention of parties, are also whether the project involve a Composite Contract. The matter hence merits to be remanded for a decision afresh based on facts and for issue of a reasoned order. 17. SITE FORMATION AND CLEARANCE S.No Name of the Project Order in original Submissions of RPP 1.....
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....n and clearance' etc and also refer to Section 65 (97A) in this regard. Hence, it cannot be said that the SCN was defective and incapacitated RPP from giving an effective reply. RPP has not challenged the classification seriously. Their contention is that they have not received any consideration for the same as the progress ended with an arbitral award which did not include the service tax element. A payment or award which is received, towards the execution of the contract involving express or implied contractual reciprocity, towards supply of specific goods or services constitutes a consideration for a supply and is taxable irrespective of by what name it is called. The argument that the arbitral award did not have a service tax component and is hence not liable to tax is not acceptable as the primary liability to pay tax is on the service provider. They may at times, not be able to recover the same from the service recipient for any reason whatsoever. However, the government is entitled to collect the tax from the service provider, irrespective of their inability to pass on the liability to the service recipient. The award should be considered as being cum-duty, as held by a Coor....