2016 (2) TMI 257 - AT - Service Tax

Waiver of pre-deposit - Erection, commissioning or installation service during the period prior to 1.6.2007 for Delhi Metro Rail Corporation Ltd. - ambit of Section 65(105)(zzd) of the Finance Act, 1994 and consulting engineer service enumerated under Section 65(105g) of the Finance Act, 1994 prior to 1.6.2007 - Held that - the conclusion is prima facie irresistible and compelling that the appellant had executed works contract, which is not taxable prior to 1.6.2007. - stay granted.

Summary

Issues:
1. Classification of services provided by the appellant to Delhi Metro Rail Corporation Ltd.
2. Determination of whether the services provided constitute a works contract.
3. Application of relevant legal precedents to the case.
4. Consideration of waiver and stay application pending appeal.

Analysis:
1. The appeal challenged an adjudication order confirming a service tax demand on the grounds that the services provided by the appellant to Delhi Metro Rail Corporation Ltd. fell within the ambit of specific sections of the Finance Act, 1994, prior to 1.6.2007, and were not classifiable as work contract services but as pre-existing taxable services, namely EClS or Consulting engineers service.

2. The nature and terms of the agreements between the appellant and Delhi Metro Rail Corporation Ltd. indicated that the services provided were indivisible and composite works contracts, despite separate segments for the supply of goods and services. The appellant undertook design, manufacture, supply, installation, testing, and commissioning of a train control system under a specific contract, establishing the composite nature of the services provided.

3. The interpretation of the contract, in light of legal precedents such as the Builders Association of India case and the Larsen & Toubro Ltd. case, led to the conclusion that the appellant had executed a works contract that was not taxable before 1.6.2007. The decision in Alstom Projects India Ltd. was overruled by the Supreme Court judgment in Larsen & Toubro Ltd., supporting the appellant's position.

4. In consideration of the arguments presented and the legal precedents cited, the Tribunal granted a waiver in full and stayed further proceedings for the recovery of the assessed liability pending the disposal of the appeal. The stay application was consequently disposed of, providing relief to the appellant during the appeal process.