TaxTMI 
TaxTMI 
2025 (7) TMI 214
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....r various categories of taxable service. The appellant's primary business involves providing works contract services both as a principal contractor and as a sub-contractor. During the period in dispute, 01.10.2013 to 30.06.2017, the appellant acted as a sub-contractor, executing work orders received from its primary contractors, namely M/s. SMCC Construction India Ltd. and M/s. Takenaka India Pvt. Ltd. The Appellant's scope of work, as a sub-contractor, encompasses a comprehensive range of construction services for newly built structures. These services include earthwork, construction activities (such as laying foundation stones, erecting brick walls, and constructing columns, slabs, and floors), as well as specialized tasks like water proofing, tiling and stonework, carpentry and glasswork (including doors, windows, and reception counters), plumbing and sanitary installations, ceiling and plasterwork, partitioning (using glass, wood, or gypsum), drainage and PVC piping, stainless steel railings, aluminum fixtures, and painting. The appellant had duly discharged the applicable service tax on the service portion of works contracts, after availing 60% abatement as per Rule 2A....
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....s fell within the ambit of 'Original Works'. He stated that the term 'original works' defined under Rule 2A included (i) all new constructions;(ii) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable;(iii) Erection, commissioning or installation of plant, machinery or equipment or structure whether pre-fabricated or otherwise. In the present case, learned counsel contended that the appellant had carried out various types of activities viz. earth work, construction work, water proofing work, tiles & stone work, wooden & glass work, plumbing & sanitary work, ceiling & partition work, plaster work, drainage work, PVC piping work, ss railing work, aluminium work and paint work etc. He stated that the building cannot be considered as fully constructed without completion of all these works which are inbuilt and was in relation to construction of new building only and therefore, the same was covered under the ambit of 'original works'. Learned counsel stated that the appellant had rightly availed the benefit of Rule 2A of the Valuation Rules 2006. Learned Counsel further submitted that the Appellant&....
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.... 1994 was not warranted, thus the impugned show cause notice is time barred for the period October 2013 to June 2017 and hence, the demand amounting to Rs. 2,00,44,332/- for the period 01.10.2013 to 31.03.2016 was liable to be dropped. He submitted that the transactions were duly recorded in the books of account of the appellant, therefore there was suppression at all. He submitted that the appellant was registered with the service tax department and had regularly been discharging its service tax liability and filing service tax returns. Hence, the appellant had no malafide intent to evade the payment of service tax, and was under bonafide view that works contract service rendered to SMCC and Takenaka were in the nature of 'Original Work'. Therefore, appellant had correctly discharged its service tax liability on value of service computed @ 40% of total amount charged for works contract service. Further, the appellant had also rendered works contract service to RKUMP for constructing 'Apna Bazar' Mandi which has been used for non-commercial purpose. Therefore, the appellant has claimed ST exemption in accordance with Entry No. 12/12A of Mega Exemption Notificatio....
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.... or 'erection, commissioning or installation. Learned Authorized Representative further stated that being the actual holder of 'original work' and assisting the actual holder in the execution of 'original work were two different things. The work orders executed by the appellant received from M/s SMCC Constructions India Limited and M/s Takenaka India Pvt. Ltd, were in the nature of 'completion and finishing services' as defined under Rule 2A (ii)(C) upto 30.09.2014 and under Rule 24 (ii) B of Valuation Rules thereafter. Accordingly, all the work orders as detailed in the SCN, upto 30.09.2014, the taxable value was to be calculated as 60% of the work order value, and from 01.10.2014, as 70% of the work order value. 5.1 Learned Authorized Representative stated that with respect to the exemption at St.No.14 (d), the same was eligible only with respect to construction, erection, commissioning, or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce, including a cold storages for such purposes. However, on going through the copy of contract awarded by the Mandi Parishad to the appellant, it was apparent that....
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....y the department. In this context, we draw support from Tribunal's decision in the case of Kalpakaaru Projects Pvt Ltd vs Pr. Commissioner, CGST, Delhi South vide Final Order 50769/2025 dated 26.05.2025, wherein the Tribunal had the opportunity to examine similar issue as to whether such works carried out by the appellant can be considered as original works. The Tribunal held as follows: "8. We have considered the submission on both sides on this count. Rule 2A of the Service Tax Valuation Rules, reads as follows: "2A. Determination of value of taxable services involved in the execution of a works contract.- Subject to the provisions of section 67, the value of taxable service involved in the execution of a works contract (hereinafter referred to as works contract service), referred to in clause (8) of section 66E of the Act, shall be determined by the service provider in the following manner, namely:- (i) Value of works contract service shall be equivalent to the gross amount charged for the works contract less the value of transfer of property in goods involved in the execution of the said works contract. Explanation.- For the purposes of this clause,- ....
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....OVIDED FURTHER that in case of works contract for construction of residential units having carpet area up to 2000 square feet or where the amount charged per residential unit from service recipient is less than rupees one crore and the amount charged for the works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on twenty-five per cent. of the total amount charged for the works contract: PROVIDED that where the amount charged for works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on thirty per cent. of the total amount charged for the works contract: PROVIDED FURTHER that in case of works contract for construction of residential units having carpet area up to 2000 square feet and where the amount charged per residential unit from service recipient is less than rupees one crore and the amount charged for the works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on twenty-five per cent. of the total amount charged for the works contract. PROVIDED that where the amo....
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....te Legislature and was a Governmental Authority as defined under explanation 2(s) of mega exemption notification. In this context, we would need to examine the provisions contained n the Notification no. 25/2012-St for the relevant period. The period of the dispute is from 1.10.2013 to 30.6.2017. The definition of Governmental authority was as follows:- For the period 1.10.2013 to 29.01.2014: "(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 under article 243W of the Constitution" For the period 30.01.2014 onwards "(s) "governmental authority" means an authority or a board or any other body; (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 or control, to carry out any function entrusted to a municipality under article 243W of the Constitution." The facts in the instant case are that the Rashtriya Krishi Utpadan Mandi Parisha....
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....ity" as in clause 2(s) should be interpreted in a manner so as to make the long line under clause 2(s) applicable to both sub-clause (i) and sub-clause (ii). In other words, as per the appellants, to qualify as a "governmental authority" under clause 2(s)(i), such authority, board or body must not only be a statutory authority set up by an Act of Parliament or a State Legislature but must also have 90% or more participation of the Government by way of equity or control to carry out any like function that a municipality under Article 243W of the Constitution is entrusted to discharge. 17. We have no hesitation to disagree with the latter interpretation sought to be placed by the appellants, for the reasons that follow. 18. In Superintendent & Legal Remembrancer, State of West Bengal vs. Corporation of Calcutta11, a nine-judge Bench of this Court, relying upon Craies' On Statute Law (6th edn), stated that where the language of a statute is clear, the words are in themselves precise and unambiguous, and a literal reading does not lead to absurd construction, the necessity for employing rules of interpretation disappears and reaches its vanishing point. 19. T....
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....or" as well as the word "and" is a conjunction; and it is well known that a conjunction is used to join words, phrases, or clauses. On how the conjunctions "or" and "and" are to be read, guidance could be drawn from authoritative texts and judicial decisions. As per Justice GP Singh's Principles of Statutory Interpretation, the word "or" is normally disjunctive while the word "and" is normally conjunctive. In English law, the position is clear as crystal, as explained by Lord Scrutton in Green vs. Premier Glynrhonwy Slate Co.15, that one does not read "or" as "and" in a statute unless one is obliged, because "or" does not generally mean "and" and "and" does not generally mean "or". 23. When the meaning of the provision in question is clear and unambiguous by the usage of "or" in clause 2(s), there remains no force in the submission of Ms. Bagchi that "or" should be interpreted as "and". In our opinion, the word "or" employed in clause 2(s) manifests the legislative intent of prescribing an alternative. Going by the golden rule of interpretation that words should be read in their ordinary, natural, and grammatical meaning, the word "or" in clause 2(s) clearly appears t....
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....tedly be given to the punctuation; however, though a punctuation may have its uses in some cases, but it cannot certainly be regarded as a controlling element and cannot be allowed to control the plain meaning. While so observing, this Court considered several decisions as well as the punctuation comma in the relevant provision of the Supreme Court Rules, 2013. 26. What follows is that punctuation, though a minor element, may be resorted to for the purpose of construction. 27. In the present case, the use of a semicolon is not a trivial matter but a deliberate inclusion with a clear intention to differentiate it from sub-clause (ii). Further, it can be observed upon a plain and literal reading of clause 2(s) that while there is a semicolon after sub-clause (i), sub-clause (ii)closes with a comma. This essentially supports the only possible construction that the use of a comma after sub-clause (ii) relates it with the long line provided after that and, by no stretch of imagination, the application of the long line can be extended to sub-clause (i), the scope of which ends with the semicolon. We are, therefore, of the opinion that the long line of clause 2(s) govern....
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.... equity or control by Government". Each word in the definition clause has to be given some meaning and merely because promoting educational aspects is one of the functions of a municipality in terms of Article 243W of the Constitution read with Schedule XII appended thereto is no valid argument unless equity or control by the Government, to the extent of 90%, is shown to exist qua the relevant authority/board/body. Incidentally, neither is there any indication in the petition nor has Ms. Bagchi been able to disclose the identity of any such authority/board/other body which is covered by her argument. No such identified authority/board/body covered by the aforesaid construction of the definition of "governmental authority" in clause 2(s) of the Clarification Notification, which the appellants appeal to us to accept, having been brought to our notice, we are unable to find any fault in the decisions of the Patna High Court and the Orissa High Court extending the benefit of the Exemption Notification to the educational institutions, and a fortiori, to SPCL. 29. We need not draw guidance from any of the decisions cited by Ms. Bagchi, except one, on the question of constru....
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....as expressed itself by making the laws and difficulties arise in interpreting what the legislature has said, a legislature cannot be asked to sit to resolve those difficulties. The legislatures, unlike individuals, cannot come forward to explain themselves as often as difficulties of interpretation arise. So the task of interpreting the laws by finding out what the legislature meant is allotted to the courts. Of course, where words are clear and unambiguous no question of construction may arise. Such words ordinarily speak for themselves. Since the words must have spoken as clearly to legislators as to judges, it may be safely presumed that the legislature intended what the words plainly say. This is the real basis of the so-called golden rule of construction that where the words of statutes are plain and unambiguous effect must be given to them. A court should give effect to plain words, not because there is any charm or magic in the plainness of such words but because plain words may be expected to convey plainly the intention of the legislature to others as well as judges." 32. Keeping the above-said ratio in mind, an interpretation of the relevant provision result....