TaxTMI 
TaxTMI 
2026 (4) TMI 1357
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....etails of the invoices based on which the cenvat credit was taken etc. They contested the demand both on merits as well as on account of limitation. After due process, the Adjudicating authority confirmed the demand, along with interest and penalty. Being aggrieved, the appellant is before the Tribunal. 2. The Ld Counsel appearing on behalf of the appellant makes the following submissions : 2.1 The details of the confirmed demand under various headings, demand hit by the time bar etc., are per the following Table: Sl. No. Description Amount (Rs.) 1) Civil Services provide to Bharat Heavy Electricals Limited (BHEL) - Period 2007-08 to 2009-10 - Demand wholly beyond Normal Period of Limitation 50,87,832.00 2) Structural Steel and Cladding work for Steel Authority of India Limited (SAIL) - Period 2010-11 to 2011-12 - Demand for 2010-11 beyond Normal Period of Limitation, demand for 2011-12 in Normal Period 5,10,509.00 3) Fettling, Machining & Assembling services to Chittaranjan Locomotive Works (CLW) Period 2008-09to 2010-11 - Demand wholly beyond Normal Period of Limitation 2,52,876/- 4) Construction services to Rajendra Agricultural Un....
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....e abatement available under Notification No.1/2006 ST dated 1.3.2006 has been denied in respect of the value of the goods used in the provision of the service. The ground taken by the Revenue is the goods have been supplied free of cost by the client. This issue stands decided by the Larger Bench in the case of Bhayana Builders (P) Ltd vs. Commissioner of Service Tax, Delhi [2013 (32) S.T.R 49 (Tri-LB)] wherein it has been held that abatement benefits would be available even if value of freely supplied materials are not included in the assessable value. Therefore, even on this ground the confirmed demand is required to be set aside. 2.4 In respect of the steel structural works undertaken for SAIL, he submits that the services in relation to 'structural steel and cladding work for extension of J-K BAY for installation at Alloy Steels Plant, Durgapur, West Bengal during the period from 2010-11 to 2011-12. The said work also includes supply of goods. The department has raised demand by classifying the service under "Erection, Commissioning or Installation Service" under section 65(105)(zzd) of the Finance Act, 1994.The subject service rendered to SAIL cannot be classified in the ca....
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....nnot be legally sustained. 2.6 The appellant has entered into a contract with the Rajendra Agricultural University in pursuance to the 'Memorandum of Understanding' (MOU) dated 06.10.2009 executed between the appellant and the said university. The Scope of Work includes new construction, renovation, special repairs, extension of University's main campus and extension centres and the appellant would be paid cost of work plus agency charges of 8.5% for the project survey, planning, management, supervision and other consultancy services including architectural services for planning, designing etc. For the purpose of execution of said project, though the appellant has subcontracted the works to various parties, the appellant is fully responsible for the quality and workmanship of the said project. The Ld. Commissioner has raised demand of service tax of Rs. 95,52,814/- in the category of "Consulting Engineering Service" on the ground that the appellant has received consultancy charges of 8.5% of the cost of project. However, while computing the said demand, the Ld. Commissioner considered the entire value of bills raised on RAU for cost of construction as well as 8.5% profit thereon....
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....legation of collection of tax amount is merely a vague allegation without any concrete evidence and hence the same cannot be sustained in absence of any specific finding in the adjudication order. In any case, there is no final finding in the OIO that service tax has been collected by the Appellant. 2.8 In respect of the Service Tax demands on the above headings, as per the detailed submissions made, it is prayed that the appeals may be allowed on merits. 2.9 The appellant has availed CENVAT Credit amounting to Rs. 8,62,823/- during the period 2007 to 2012 under the provisions of CENVAT Credit Rules 2004. In the impugned OIO, it has been alleged that the said credit has been availed without any supporting invoices. Further, it has been alleged than an amount of Rs. 2,22,649.00 has been availed and/or utilised in excess of the available CENVAT Credit balances during the relevant period. The Appellant submitted that there was a mistake in not disclosing the credit amount in the returns. Reliance in this regard is placed on the decision in the case of Antares Services Pvt Ltd vs. CCE 2024 (388) ELT 200 (Tri-Chand) and further in the case of M/s. Origin Learning Solutions Pvt Ltd....
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....he Hon'ble Supreme Court held that the assessee being a PSU was owned by the Government could not be charged for suppression even though duty was legally payable on the portion of RFO used in generation of electricity sold outside the refinery. 2.14 In view of the above submissions, it is also prayed that the confirmed demands for the extended period may be set aside on account of time bar also. 3. The Ld.AR appearing for the Revenue reiterates the findings of the Adjudicating authority and justifies the confirmed demand. 4. Heard both sides, perused the appeal papers and further submissions made by the appellant. 5. We first take up the smaller issues involved in this appeal. 6. In respect of the services provided to Chittaranjan Locomotive Works (CLW), Indian Railways, the Appellant has duly paid applicable sales tax on supply of materials for use in said contract. A part of the demand proposed in the SCN has been dropped by the Ld. Commissioner on the basis of submissions made by the appellant. The admitted liability by the appellant is to the extent of Rs. 2,52,876/-, against which the appellant has already paid Rs.2,24,654/- by cash through treasury challans and....
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....'ble Supreme Court in re Larsen & Toubro has decided thus '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 Section65 (105) which defines "taxable service" as "any service provided". All the services referred to in the said subclauses 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 nonservice elements from the composite works contracts has been made by any of the afores....
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....nder Erection Commissioning and Installation Services but under "Works Contract Services" as Section 65(105) (zzzza) of the Finance Act, 1994. They have also relied on case laws to this effect. 13. We find that the appellant themselves in Para (8) of their submissions have admitted that out of the total demand, part of the demand amounting to Rs.7,79,457 has been dropped on the ground that no Invoice was raised by them for the works. We find that the Revenue has not filed any appeal against this dropped demand. In respect of the balance confirmed amount of Rs.5,10,509 it stands admitted by the appellant that they have utilized Cenvat Credit to the extent of Rs.3,68,476 towards this tax due and even the balance of Rs.1,42,033 was also paid by utilizing the Cenvat but they have inadvertently not shown same in the ST 3 Return. This makes it clear that the appellant had not taken any stand on the ground that they are not liable to pay the Service Tax, as is being taken up by them now. They were taking the Cenvat Credit, paying the Service Tax, showing the same in the ST 3 Returns and in one case they have used the Cenvat Credit, but failed to account for the same in ST 3. Therefore,....
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....ly holding this margin of Rs.5 cannot be treated as 'commission' under Business Auxiliary Services and have held that this is clearly the profit margin, which cannot be made exigible to Service Tax. Similar instances have come up in respect of Advertisement Agency commission of 15%, booking of container slot etc., wherein it is seen that the service provider shells out the booking amount and retains the 15% as his profit margin. However, on going through the MOU, It is seen that while the appellant is defined as Executive Agency. it has been provided that they would be given the full cost of the project + 8.5% as Agency Charges at Para 2.2 of the MOU reproduced above. We have already held that the Revenue is in error in adding the full cost of the project, which is nothing but the total cost of the project for which the appellant / his contractor has provided all the materials and related services. This cannot be taken as the consideration received by the appellant. As a matter it is more in the nature of reimbursement of the total project cost incurred by the appellant through his sub-contractor. But since the 8.5% Agency Charges have been specifically provided separately over and....
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....3 Supreme Court cases 393, the Hon'ble Apex Court has held as under : "7. The question still remains as to whether the Department was right in invoking the extended period of limitation under Section 11A of the Central Excise Act. In this connection, we are of the view that there was no suppression on the part of the assessee. As stated above, the assessee is a Public Sector Company. It is owned by the Government of India. The Department was aware that the assessee was a refinery. Nothing prevented the Department from visiting the site. Nothing prevented the Department from inquiring into the process within the refinery in the matter of production of naptha, sulphur and electricity. Generation of electricity was also used for the running of the refinery. The electricity was supplied to Tamil Nadu Electricity Board (partly). In the circumstances, there was no suppression on the part of the assessee ......" 19. The Delhi Bench of CESTAT in CCE Indore vs. Nepa Ltd. 2013 (298) ELT225 (Tri-Del) has held as under: "8. ......In this regard we find that the respondent is a Public Sector Undertaking wholly owned by the Government of India and in our view it would be abs....
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....14 till 13-5-2015 which had already become time-barred could not have been confirmed by the Commissioner by applying the amended period of two years. The fact that the Notice had been issued on 8-11-2016, by which time the limitation period had increased to two years, could not give the Revenue an authority to revive and resurrect demands which had already become dead before the amendment. To do so, would be to give the amended provision a retrospective effect which the Legislature did not do while bringing in the amendment. It is a settled law that any statutory amendment is prospective in its operation unless it is specifically declared to have retrospective operation. The Finance Act, 2016 does not contain any provision according to a retrospective operation to the said Act. As such, demands which had already become irrecoverable as on 13-5-2015 could not, by virtue of the amendment with effect from 14-5-2016 get resurrected or revived. 16. In view of the above, we hold that the demand for the period prior to 13-52015 was barred by limitation and could not have been confirmed even if a different view is taken on the merits of the matter. Since we are holding in favour o....
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....only for the normal period. The re-quantified Service Tax amount is required to be paid by the appellant along with interest. Considering the factual details, the penalty is being set aside. 24. The appeal is disposed in the aforesaid manner. (Order pronounced in the open court on 21.04.2026.) ============= Document 1 45 after Page 2 of 26 0:SCT:259:06 (Rev 00) SOPPE The work to be performed under this specification consists of providing all labour, materials, consumables, equipment, temporary works, temporary storage sheds, temporary colony for labour and staff, temporary site offices, constructional plants, fuel supply, transportation and all incidental items for the completion and proper functioning of the plant, all in strict accordance with the specifications including revisions and amendments thereto as may be required during the execution of work for Site leveling and grading, Earth cutting/filling, Dismantling of existing exhaust stacks equipment incl. Insulation & Steel structure, duct work etc, disposal, all civil, foundations, structural and architectural works mainly associated with but not limited to equipments which shall include : a) STG Hall c....
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....sh documentary evidences towards payment of Works Contract Tax as and when required by BHE 2.2 Service tax and Educational Cess on service tax (as applicable), shall be pald extra on zubmiss of documentary evidences to the satisfaction of BHEL. You shall avail acatement avalla (wherever applicable) as per prevailing service tax rules. BHEL will reimburse service tax a Ba, Kg 118 Tective Date Article 1 Effective Date The Effective Date of Contract is the date of issue of LOI i.e. 22nd April 2010. Scope of Work (Reference SCC Clause 1 & 4 Scope of Facilities 4.1 Technical Specifications) The Contract is for the execution the of Scope of Work as specified in SCC, GCC and Technical Specifications. Physical quantities of Structural steel and cladding work for extension of J-K bay at CCS as indicated in Priced Bill of Quantities of Technical Specifications pro-rata basis as per the Terms of Payment. are indicative only for the purpose of making progress payments on Time of Completion (See clause 2 Time is Article 5, Time for Completion Article 6 5.1 of SCC) the essence of the Contract. The Work shall be completed in Date nine (9) months from of the Con....
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....The the Effective Work shall be considered as completed when completion certificate has been issued by the Employer. Guarantee (GCC clause 70 & SCC clause 15) The Contractor shall stand guarantee for his work at least for one year from the date of handing over of the Work for any defect due to bad workmanship or poor performance or partial or total breakdown of Work as a whole. If any such defect or breakdown same shall takes place in that period, the be made good to the complete satisfaction of the own cost. Company, at the earliest without any delay, by the Contractor at his Consultant (Reference GCC Clause M.N. 1.16) M/s Dastur & Company (P) Ltd, shall be the the Work. The Consultant for Consultant in relation to the Contractor shall have such functions as ar. delegated to him in their Contract or as may be delegated to him by the Employer from time to time. Employer shall keep the Contractor informed of such delegation. there is any difference between the on any If Contractor and the Consultant matter about the implementation of the matter shall be referred this Contract, to the Employer, whose Consultant. dec....
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.... week or part of a week which shall elapse between and the date prejudice to the time prescribed or extended time as the case may be of completion of work. The Employer may without any other method of recovery deduct the amount of such damages from any money in his hand due or which may become due to the Contractor. The payment or deduction of such damages shall not relieve the Contractor from his obligation to complete the work or from any other obligation and liabilities under the contact. In case of delay or failing to complete the job even after three months of completion period the job may be terminated and executed by other agency at the risk and cost of the defaulter. If before the completion of the whole of the work, any part of the work have been certifled by the Engineer as completed hereof and occupied or used by the Employer, the liquidated damages for delay shall be for any period of delay after such certification be ore Depr 8 dat Document 2 Rs. 100 ONE सौ रà¥à¤ªà¤¯à¥‡ HUNDRED RUPEES 5.100 HING INDIA INDIA NON JUDICIAL F 754149 शनिगवा पशà¥à¤šà¤¿à¤....
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....c work to the Executing Agency under budgetary provision of the Owner. 2.0 SCOPE OF WORK The Executive Agency shall be paid the actual cost of works pl Agency Charges of 8.5% (eight point fiver percent) only there on 1 project survey, planning, management, supervision, and oth consultancy services including Architectural Services for planni designing etc. all complete. 2.2 The Expression 'actual cost of work' shall include the following: 2.3 (i) The actual cost means total cost of survey, planning of project construction including arbitration award/ any ci decree in favour of Contractor. However, the Executive Age shall not charge agency charges as applicable on arbitra award/ any court decree in favour of any contractual agen (ii) The cost of work may not exceed more than the amou administrative approval by the owner. If it is unavoidable, the Executive Agency shall get prior approval from the c for awarding the work(s). * CPasion The actual final cost of work not include: (ii) Cost paid by the owner to local government or any other statutory body or bodies for getting approval for the project. Cost of land 2.5 Where the Executive Agency require....
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....Executing Agency will make its best endeavor to reduce the cost of construction by any change of specifications, method of construction, value engineering or any innovative or economical design. Such reduction in the cost of construction shall only be made without affecting/ prejudicing or endangering in any way of safety or security of the project constructed by the Executing Agency. The benefit of such reduction in cost will be passed on to the Owner. The Executing Agency shall be fully responsible for the quality, structural safety, workmanship and liability of defects. The Executing Agency shall make their contractors responsible for rectification of any defect within defect liability period. 3.12 Any defect discovered and brought to the notice of the Executing Agency during the progress of the project or within defect liability period, shall be got rectified by Executing Agency forthwith through their contractor without any cost and expenses to Owner. In the event of the failure on the part of the Executing Agency to rectify the defects during defect liability period, the same may, without prejudice to any other rights available to its by law, b rectified by the Owner....