9911796707
TMI Blog2013 (9) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority on the ground that the appellant herein has not discharged the Service Tax liability on the value of plants and machinery procured by them on behalf of service recipient. 3. Ld. Counsel Shri V.K. Jain, Shri Vishal Agarwal and Ms. Dimple appeared on behalf of the appellant. Ld. Counsel would submit that the appellant had been awarded a contract of construction of power plant by M/s Vadinar Power Co. Ltd. (VPCL for short) and M/s Essar Power (Gujarat) Ltd. (EPGL for short). It is his submission that the appellant entered into two independent contracts with the said M/s VPCL and M/s EPGL, one for supply of indigenously procured plant and machinery and other one for erection, installation and commissioning of the power plant. It is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 22.05.2007. He would read the provisions of Rule 3(1) of the said Rules and submit that the explanation given to the said Rules will not apply for inclusion of the value of indigenously procured goods. It is his submission that subsequently on 07.07.2009, the said explanation to the said rules was substituted, which indicated that the value of the goods used in relation to the execution of works contract whether supplied under any other contract for a consideration or otherwise shall be includable. He would draw our attention to the proviso indicated therein in the said explanation and submit that that provision will apply in full force in that case. He would also draw our attention to CBE&C Circular dt.06.07.2009 and submits that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by a separate contract, which is termed as 'supply contract'. It is his submission that various clauses of the Service Tax contract would indicate that the appellant is responsible for the functioning of plant, once it is tested and handed to M/s VPCL or M/s EPGL, as the case may be, and that the appellant is also required to train and attend to the defects which arises during the test of such power plant. It is also his submission that the power plant which is sought to be erected would not have come into existence in the absence of plant and machinery, which is supplied under supply contract. It is his further submission that holistically reading the entire contract, the services provided by the appellant would indicate that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has been procured by the appellant and supplied to M/s VPCL and M/s EPGL could be included for discharge of Service Tax liability for the services rendered under erection, installation and commissioning services. 8. At the outset, we find that the said agreement is entered into by the appellant prior to 07.07.2009. Revenue is not disputing that there are two agreements entered into by the appellant one for supply of plant and machinery and another for erection, installation and commissioning of the plant. It is also undisputed that the appellant has discharged Service Tax liability on the entire contract value of erection, installation and commissioning contract. 9. On perusal of the records, we find that the said rule, wherein the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution under the said contract has commenced or where any payment, except by way of credit or debit to any account, has been made in relation to the said contract on or before 07.07.2009.] 10. It can be seen from the above reproduced sub-rule 3(1) and more specifically the proviso to such explanation, we find that, prima facie, appellant is not required to include the value of the plant and machinery for discharge of Service Tax liability under erection, installation and commissioning services rendered by him as the said proviso specifically provides for inapplicability of the said explanation for the contract entered prior to 07.07.2009, wherein the work has commenced. As already recorded, the said contract was entered into by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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