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2019 (4) TMI 21 - AT - Service TaxVarious construction services - Levy of service tax - Commercial or Industrial Construction Service (CICS) - Erection, Commissioning and Installation Service (ECIS) - Interior Decorator Service - Construction of Residential Complex Service. Held that - Hearing was completed in respect of Appeal Nos. ST/163/2011 and ST/164/2011. The facts of the case and submissions of both sides were dictated in court. Due to paucity of time, further hearing of this batch of cases was adjourned to 13.03.2019.
Issues Involved:
1. Commercial or Industrial Construction Service (CICS) 2. Erection, Commissioning, and Installation Service (ECIS) 3. Interior Decorator Service 4. Construction of Residential Complex Service Issue-wise Detailed Analysis: I. Commercial or Industrial Construction Service (CICS): A. Project Name: MAHE - Work involved: Construction of Indoor Stadium - Amount of Service Tax demanded: ?17,27,456/- - Ground for confirmation: The indoor stadium is used for rent, public functions, and events, generating income, hence considered commercial. - Defence: The contract is composite, and the ratio from Commissioner of C.Ex. & Cus. Vs. M/s. Larsen & Toubro Ltd. and M/s. Real Value Promoters Pvt. Ltd. applies. B. Project Name: DCW - Work involved: Construction of water treatment plant and effluent treatment plant. - Amount of Service Tax demanded: ?18,87,946/- - Ground for confirmation: The work is taxable. - Defence: Main contractor has paid the tax; the contract is composite, and the ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. C. Project Name: SSP - Work involved: Civil work at Steel Plant. - Amount of Service Tax demanded: ?5,55,873/- - Ground for confirmation: The work is taxable. - Defence: Sub-contractor status, main contractor discharged tax liability, relying on Power Mech Projects Ltd. case. D. Project Name: SIPCOT, Perundurai - Work involved: Construction of infrastructural building. - Amount of Service Tax demanded: ?4,25,660/- - Ground for confirmation: Payment received after 01.03.2005. - Defence: Composite contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. E. Project Name: KSR - Work involved: Construction of civil and structural work. - Amount of Service Tax demanded: ?121,176/- - Ground for confirmation: Tax is leviable even if not received from the client. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. F. Project Name: AMPA - Work involved: Construction of Ampa centre. - Amount of Service Tax demanded: ?47,60,051/- - Ground for confirmation: Tax is leviable even if not received from the client. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. G. Project Name: CHP - Work involved: Construction of weaving park. - Amount of Service Tax demanded: ?41,71,534/- - Ground for confirmation: Tax confirmed despite non-payment by the recipient. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. H. Project Name: NEWELI BRIDGE & ROAD - Work involved: Construction of structural and electrical work. - Amount of Service Tax demanded: ?75,735/- - Ground for confirmation: NLC is a commercial organization; no split-up figures provided. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. I. Project Name: VPR - Work involved: Construction of civil work for effluent treatment plant. - Amount of Service Tax demanded: ?11,78,476/- - Ground for confirmation: Treated as industrial purpose and taxable. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. II. Erection, Commissioning and Installation Service (ECIS): A. Project Name: TWAD-LAKKA - Work involved: Erection and Commissioning of Common Water Supply Scheme. - Amount of Service Tax demanded: ?2,79,001/- - Ground for confirmation: Classified as Works Contract relying on Raipur Vs. BSBK Pvt. Ltd. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. B. Project Name: MRTS-SR - Work involved: Electrification of station building. - Amount of Service Tax demanded: ?48,169/- - Ground for confirmation: Classified as Works Contract relying on Raipur Vs. BSBK Pvt. Ltd. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. C. Project Name: KTC - Work involved: Erection and Commissioning of submersible pump. - Amount of Service Tax demanded: ?11,21,993/- - Ground for confirmation: Covered under plumbing, drain laying, and other installation for transport of fluids. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. D. Project Name: ATP - Work involved: Water Supply Scheme. - Amount of Service Tax demanded: ?5,65,068/- - Ground for confirmation: Work completed before 16.06.2005. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. E. Project Name: MTP - Work involved: Erection and commission of CWSS. - Amount of Service Tax demanded: ?21,50,548/- - Ground for confirmation: Not classified as Works Contract Service. - Defence: Composite Works Contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. F. Project Name: HCC - Work involved: Construction of intake raw water pumping station. - Amount of Service Tax demanded: ?1,90,208/- - Ground for confirmation: Work completed before inclusion of ECIS. - Defence: Public use, composite contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. G. Project Name: MGS-SUB - Work involved: Erecting and Commissioning of emergency cooling for fire fighting water system. - Amount of Service Tax demanded: ?4,027/- - Ground for confirmation: Work completed prior to ECIS introduction. - Defence: Composite contract, ratio from Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. applies. H. Project Name: L&T BIWADI - Work involved: Materials supplied by the client. - Amount of Service Tax demanded: ?2,29,507/- - Ground for confirmation: No evidence of main contractor paying service tax. - Defence: Tax liability paid by the main contractor. III. Interior Decorator Service: A. Project Name: CPCL - Work involved: Landscape development work. - Amount of Service Tax demanded: ?13,61,820/- - Ground for confirmation: Service tax leviable for providing advice, consulting, technical assistance, etc. - Defence: Only civil work provided, no advice or consulting, limited scope of "any other manner." B. Project Name: PUZHAL - Work involved: Beautification work of landscape. - Amount of Service Tax demanded: ?4,39,264/- - Ground for confirmation: Service tax leviable for providing advice, consulting, technical assistance, etc. - Defence: Only civil work provided, no advice or consulting, limited scope of "any other manner." IV. Construction of Residential Complex Service: A. Project Name: PPH - Work involved: Construction of 161 quarters for police personnel. - Amount of Service Tax demanded: ?19,76,104/- - Ground for confirmation: Police Housing Corporation is a commercial concern. - Defence: Settled in cases like M/s. Bismi Engineering Contractors and M/s. Sima Engineering Constructions. B. Project Name: APHS - Work involved: Construction of police personnel quarters. - Amount of Service Tax demanded: ?38,659/- - Ground for confirmation: Police Housing Corporation is a commercial concern. - Defence: Settled in cases like M/s. Bismi Engineering Contractors and M/s. Sima Engineering Constructions. C. Project Name: APH/NPP/PPH/PHD - Work involved: Construction of police personnel quarters. - Amount of Service Tax demanded: ?19,19,898/- - Ground for confirmation: Police Housing Corporation is a commercial concern. - Defence: Settled in cases like M/s. Bismi Engineering Contractors and M/s. Sima Engineering Constructions. Department's Arguments: - Supported the impugned Order and reiterated the findings. - Relied on different case laws such as M/s. G.D. Builders, M/s. BCC Developers and Promoters Pvt. Ltd., and M/s. National Building Construction Corporation Ltd. - Argued that the scope of "any other manner" in Interior Decorator Service is wide. - Contended that police quarters have a commercial intent as rent is collected. Conclusion: - The Tribunal considered the arguments from both sides and adjourned the further hearing to 13.03.2019.
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