TaxTMI 
TaxTMI 
2026 (6) TMI 899
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....use Notice came to be issued on 23.04.2015. The Show Cause Notice was issued demanding the Service Tax for the period 2009-10 to 2013-14, by invoking the extended period provisions. The appellant filed their detailed reply as to how they are not liable to pay any Service Tax and contes-tested the demand both on merits as well as on account of limitation. After due process, the Adjudicating authority confirmed the demand. Being aggrieved, the appellant is before the Tribunal. 2. The Ld Counsel, appearing for the appellant makes the following submissions : 2.1 The appellant has executed various projects for Government Construction like construction of Community Health Centre of Government of Jharkhand, Construction of Navodaya Vidyalaya, Construction of ER-CR-ESCAP Channel (canal) of Water Recourse Department, Government of Jharkhand and construction of road under PMGSY Scheme. The appellant states all the aforesaid construction are made under formal contract/agreement on turnkey basis, all such contract are on cost plus margin basis. 2.2 The appellant submits that none of the aforesaid contracts are coming with the definition of Commercial or Industrial Construction Service....
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....ons of the Finance Act. The petitioner is involved in performance of composite works contracts and vivisection of such contracts of segregate the service element and impose service tax on the same is not permissible..." 2.9 The appellant states that in appellant's own case, the ld. Commissioner of Central Excise and Service Tax, Bangalore IV Commissionerate has dropped the proceedings initiated on the similar facts and circumstances vide order dated 22-09-2016. 2.10 The issue is squarely covered by the decision of the Hon'ble Tribunal in Commissioner of C.E., Vadodara VS. Ballast Nedam International, 2015(40) STR 186(Tri- Ahmd). 3. In view of the above submissions, the Ld Counsel prays that the appeal may be allowed on merits. 4. He further takes the stand that the SCN issued on 23.04.2015 for the period 2009-10 to 2013-14 is time barred for the extended period demand for the following reasons : (a) The works executed by the appellant are fully exempt from payment of Service Tax by way of statutory provisions and Notifications issued from time to time. Hence, the appellant entertained a bonafide belief that they are not required to pay any Service Tax. ....
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....efined under Section 65 (31) of the Act. [Emphasis supplied] 7. CBEC vide its Circular F.No. B.43/5/97-TRU dated 02.07.97 has clarified that the scope of the service of consultant may include the service of construction supervision and project management. It is also clarified vide Circular No. 138/7/2011-ST dated 06.05.2011 that services of architect and consulting engineer hired in relation to construction of roads, tunnels, and bridges etc. will not be exempted from levy of Service Tax. Thus, Input services like architect and consulting engineering services used for construction, repair, alteration, renovation or restoration of roads are not exempt from levy of the Service Tax. As such, in accordance with the Tripartite agreement it is clear that the services rendered by the Noticee in the capacity of executing agency of PMGSY is a taxable service under the category of 'Consulting Engineers' as defined in clause-31 of the Section- 65 of the Act ibid. 10. Based on above, the calculation sheet for service tax liability is under on aforesaid agency fee. F. YEAR 2009-10 UNIT NVS/NVS CHC PMGSY WRD/Cana....
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.... 77491 13487318 ED (2%) 5096 6041 257060 1550 269746 SHED (1%) 2548 3020 128530 775 134873 TOTAL (S.TAX including Cess) 13891937 Grand Total Service Tax including Cess Rs.3,69,71,834/- (S.Tax Rs.3,58,94,986/-, Ed.Cess Rs.7,17,898/, SHED Cess Rs.3,58,950/-) for the period 2009-10 to 2013-14 11. It is a statutory obligation of the service provider to obtain Service Tax Registration from the Department in terms of the provisions of Section 69 of the Act read with Rule 4 of the Rules, to assess their taxable value in terms of provisions of Section 67 of the Act and also to calculate and pay the Service Tax leviable thereon under the provisions of Section 68 of the Act read with Rule 6 of the Rules and to file periodical returns in terms of the provisions of Section 70 of the Act read with Rule 7 of the Rules. In spite of conversant Consultant Engineer, the said Noticee did not obtain Service Tax Registration under the appropriate head, did not assess their taxable value, did not pay Service Tax along with the applicable Cess and did not file the periodical returns by mentioning actual receipt of the sum collected against th....
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.... 5 years and further maintenance of 5 years. 13. These clauses clearly show that the work undertaken by the appellant is a kind of EPC contract for construction of Road, wherein upon producing the total expenditure [cost] the appellant would be eligible for 10% fee. The entire expenditure + fee is paid by the Govt of Jharkhand treating the same as a single contract. 14. We have also gone through one more MOU. The relevant portion is reproduced below:   15. The above documents also clarify that the activity undertaken by the appellant is towards construction of Hospitals and Educational institutions. They are composite contracts on turnkey basis being awarded to the appellant. 16. We have gone through the Running Bills raised by the appellant for their services. Some sample bills are reproduced below : 17. We have also seen the TDS certificate produced by the appellant. Some samples are reproduced below: 18. From the above documentary evidence read together would clarify that: (a) The appellant is executing the contract towards construction of roads, hospitals and other facilities on turnkey basis. (b) Irrespective of the construction / civil....
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....S details. 21. Thus, it is seen that the Revenue has completely failed to bring in any evidence that the appellant has rendered any service under the category of 'Consulting Engineer's service'. On the other hand, the evidence produced by the appellant shows that the work undertaken isa EPC / turnkey project works contract involving supply of materials and service. 22. In the present case, the SCN has been issued for period 2009-10 to 2013-14 on 23.04.2015 and for the entire period, the allegation is only towards providing the 'Consulting Engineer's service' as observed above. At this point, it would be relevant to go through the landmark judgement of Punjab & Haryana High Court in the case of Commissioner Of Central Excise vs Dr. Lal Path Lab (P) Ltd., rendered on 14 September, 2007[Dr. Lal Path Lab Vs. CCE - 2006 (4) STR 527 - Affirmed by Supreme Court - 2007 (8) STR 333 (P&H).] The relevant portions are extracted below: 5. On further appeal filed by the assessee-respondent, the Tribunal came to the conclusion that the activities of the assessee-respondent were not covered by the provisions of Section 65(19)(ii) of the Act. The view of the Tribunal is discernible f....
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.... activity of the assessee-respondent is confined to a collection centre with facilities and trained employees for drawal of blood samples and to carry out essential processing (serum separation) of blood and forwarding the samples to the principal lab at Delhi through courier. The collection centres are also responsible for disposal of waste arising in the process. The case of the assessee-respondent appears to be covered by the exception postulated by Sub-section (106) of Section 65, which defines the expression "technical testing and analysis". The provision is reproduced hereunder for facility of reference: 'technical testing and analysis' means any service in relation to physical, chemical, biological or any other scientific testing or analysis of goods or material or any immovable property but does not include any testing or analysis service provided in relation to human beings or animals ; Explanation.-For the removal of doubts, it is hereby declared that for the purposes of this clause, 'technical testing and analysis' includes testing and analysis undertaken for the purpose of clinical testing of drugs and formulations ; but does not includ....
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....activity as 'Consulting Engineer's Service' when the same is in the nature of composite EPC / Turnkey contract towards supply of proves fatal to its case. The cited judgements are squarely applicable. On this ground itself the impugned order cannot be legally sustained. Hence, we set aside the same. 25. Coming to the issue of Revenue taking only a part of the total consideration, as 'Consulting Engineer's fee for fastening the Service Tax demand when the Agreement / Contract is for turnkey project, we go through the relevant CBIC's Circulars and case laws discussed below: D.O.A.NO.334/44/2006-TRU, dated 28-02-2006 [relevant portion] 3.2 Often services provided consist of more than one service. In such cases, it is important to decide, for the purpose of classification of services, whether each element of the transaction should be treated separately or as a single composite transaction, albeit, made up of two or more separate services. A composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service and accordingly classified. The decision is to be made on question of facts and law. It will....
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.... Authorities was less than 7% of the total cost of the contract. Learned Counsel has also taken us to the relevant case law to show that in the case of work contracts, components cannot be taken as separately transactions. He pointed out that in the State of Punjab v. Associated Hotels India Ltd. (1972) 1 Supreme Court Cases 472, the Apex Court held that the primary objective of the contract would determine the issue. Learned Counsel pointed out that in the present case, since the primary objective of the contract was a construction of desulphurisation plant, it is not amenable to be split into individual components for levy of service tax. Learned Counsel has also pointed out that in the instant case, Engineers India Ltd. was the consultant of IOC and the main design, drawing and other consultancy services were provided by the Engineers India Ltd. and the appellant carried out only the residual process design and detailed engineering for the construction of the issue. 5. The issue raised in the present appeal is whether there is consulting engineer services involved in the appellants contract with IOC. "Consulting engineer" has been defined as under for the purpose of ser....
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....on'ble Supreme Court when the appeal filed by Revenue was dismissed [2004 (170) E.L.T. A181]. He has also relied upon Tribunal's decision in case of M/s. Larsen & Toubro Ltd. - 2004 (60) RLT 505 (CESTAT-Delhi) = 2004 (174) E.L.T. 322 (Tri.), wherein it was held that design element of the work contract is not to be subjected to Service Tax by vivisecting the contract. 2. We find no infirmity in the impugned order of the Commissioner (Appeals), which is based upon the earlier decisions of the Tribunal. 3. Revenue's appeal is, accordingly, rejected. COMMR. OF C. EX. & CUSTOMS, VADODARA Versus LARSEN & TOUBRO LTD. 2006 (4) S.T.R. 63 (Tri. - Mumbai) 31. We have considered the submissions made by both the parties. We find that facts of the present case are squarely covered by the Tribunal decision in the case of Daelim Industrial Co. cited supra and the department's SLP in the case of Daelim Industrial Co. has been dismissed by the Apex Court. Further the decision of the Daelim Industrial has been followed by this Tribunal in the case of M/s L&T Ltd. Its ratio has also been referred to by the Gujarat High Court in the case of Elecon Engineering Co. Ltd. v. U....
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.... are essentially for construction and not for the services and the services referred to are an integral part of contract. The contract is a work contract on a turnkey basis and not a consultancy contract. It is well settled by series of case laws that a work contract cannot be vivisected and part of it subjected to tax. The decision in the Associated Hotels case does not lend any support to the revenue as a solitary instance cited by the learned S.D.R. in the case of S. Krishna of Andhra Pradesh High Court has been undone by the Supreme Court in Guntur Tobacco Ltd.'s case (supra) by the appellants. The 46th amendment to the Constitution has also not made any difference to the decision of Associated Hotels as it was mainly with respect to sales tax which introduced deeming provision which is not the case before us. The Kerala High court decision in Kerala Colour Lab Association's case (supra) also does not help revenue as in that case the principal contract was that of service and not of sale of photographic material and, therefore, it was correctly held that once the taxing event is rendering of service and the entire activity of the assessee answer the description of taxable photo....
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....ion 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case." 31. In the present case, no specific evidence has been brought in by the Revenue towards wilful suppression on the part of the appellant. Therefore, we are not inclined to accept the Revenue's contention that any case has been made out for invoking the extended period provisions. Accordingly, we set aside the con....
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....hand HSCL Ministry of Rural Development TopoReally How / HUTS W. . L; MOHAPATRA " MUSIKTY of Rural DiTYrone Kriski Betwe now bile WITNESSETH WHEREAS the State of Jharkhand, First Party, intends to award the work of construction work of Sandar Hospital, Community Health Center as per Annexure enclosed. HINDUSTAN STEELWORKS CONSTRUCTION LIMITED (HSCL) the Whereas we which are government of India PSU's have the resources and capabilities in taking up such construction work of projects as per requirement and has agreed to take up the same as implementing agency on behalf of Department of Health, Govt. of Jharkhand, Ranchi. NOW THEREFORE, it has been agreed between the parties as under: - . It is agreed that the first party will provide the requirements for drawing constructed to the second party. the requisite guidelines, . The First party will Provide thethe Construction to the Second Party. The First party will provide revenue maps and details of land to the 1. The First party will provide necessary assistance in executing the project The second party shall comply with the term and conditions as given below: - a) The executing agency will comp....
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....ancial expenditure. VIII. HSCL will carry out Monitoring, Supervision and Quality Control as per provisions of PMGSY Guidelines. HSCL shall perform such monitoring and supervisory functions as may have The Government of Jharkhand Department under PMGSY Guidelines. Gover shall constitute a monitoring and supervision committee headed by local, representative of HSCL and nominee of Ministry of Rural Development to oversee the Programme and resolve operational difficulties faced by HSCL or the Executing Agency. IX. Completion and Handing over and Maintenance On successful construction/implement . shall handover the roads to Rural Engineering Organisation, Government of Jharkhand and shall issue Handing over/Taking of latter. HSCL splaner maintenance period also. डॉ० à¤. के. पाणà¥à¤¡à¥‡à¤¯ पà¥à¤°à¤§à¤¾à¤¨ सचिव 4 पी 1 तथा पी. à¤à¤®. जी.à¤à¤¸. वाई.) × Liquidated Damages All amounts towards Liquidated Damages, if any, as may be received by HSC1. under this provision, shall be suitably a....
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....y of P .::::: 44/2007 BETWEEN The State of Jharkhand of the first part. ç›® AND M/s HINDUSTAN STEELWORKS CONSTRUCTION LIMITED (HSCL) having its registered office at P-34-A Gariahat Road (South) Kolkata-700031 of the other part. 01 4 1 Banias c) The amount of the estimated cost of the project will be made available to the concerned agency against the Bank Guarantee. d) The first party shall have the right to inspect and monitor the projects. e) The first party shall have the power to allocate and amend the project area of the second party. f) The second party will be liable to supply all necessary construction materials and the first party shall have the power to inspect the quality of the materials. The second party shall bear the expenses of any such inspections by the first party. g) The second party shall undertake the guarantee of the completed project regarding defect and liability for five years. 6. The second party will complete the project within the time limit of 24 months/years 2 from the date of receipt of first Installment of required funds. 7. The second party shall be responsible for Quality/Quantity of the said project. 8....
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....ost as well as time. 4. The Construction agency shall be paid mobilization advance upto 20% of the amount of Administrative Approval (excluding CA charges) on submission of Bank Guarantee, in favour of Navodaya Vidyalaya Samiti from a scheduled bank in the prescribed proforma. : 3. Document 3 Bridge :- @ch-1+200M in hutar to chitra package no-JH17HS18 PMGSY, Block -: Chainpur Bridge Length -: 43.80 m Item. no Ref Mord standard data/mor d specificati om Description of work Unit Rate Quantity Amount upto since. uptodate since.prev. date prev. <14 11.1/300 per drawing and technical specification clause 305.10 including setting out, construction of shoring and bracing removal of stumps and other deleterious 1-1 Up to depth 0 to 3m cum 186.36 401.72 401.72 74864.54 74864.54 2.0 Soft Rock w/o blasting cum 224.61 231.25 231.2 (51929.83 (51929 83 19- C.1 6.2 11.40/800 & 1200 Plain cement concrete /RCC In open foundation complete as per drawing and technical specifications clauses 802,803,1202 & 1203 $35.6 225€ 50672 0.00 50672 11.40/800 &1200 (a) PCC Grade M-15 cum 4766.59 19.116 19.116 91118.13 91118.13 11.40/800 &1.200 (b) RCC Grade M-25 ....
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....12237 Form 26AS File Creation Date Current Status of PAN Assessme nt Year Name of Assesse e HINDUSTAN STEELWORKS Address Line 1 Address Line 2 Address Line 3 Permanent Account Number (PAN) Financial Year Address Line 4 COMMISS ARIAT 5/15/2026 AAACH9524R CONSTRUCTIO N LIMITED 2011-12 5-Jan OAD HASTINGS PART A - Details of Tax Deducted at Source Total Amount Paid/ TAN of Deductor PINCO219 Total Tax Credited(R Deducted( Sr. No. Name of Deductor Total TDS Deposited(Rs.) 66 CHIEF ADMINISTRATIVE OFFICER 6F Amount Paid / Sr. No. Date of Booking Tax Credited[R Deducted[ 23-Dec-11 P 2 1940 29-Aug-13 29-Aug 13 B 23-Dec-11 P 3 1940 23-Dec-11 P 29-Aug-13 OFFICE OF THE CHIEF ADMINISTRATIVE 68 OFFICER (CONST) PATNA PTN00031 2E 2.08E+08 4775876 4775876 Amount Paid / Tax Sr. No. Transaction Status of Date of CreditedIR Deducted[ Section Date Booking Booking Remarks s.) Rs.) TDS Deposited(Rs.) 1 194℃ 31-Mar 12 P 24-Apr-12 - 1751514 40285 40285 2 194C 31-Mar-12 P 24-Apr-12 B 1751514 40285 40285 3 194C 31-Mar-12 F 22-Nov-12 ....