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TMI Blog2016 (10) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Commissioner dated 21.06.2006 confirming the demand for an amount of ₹ 90,51,101/- (Rupees Ninety Lakhs Fifty One Thousand One Hundred and One only) along with interest and penalties under Sections 76, 77 and 78 of Finance Act, 1994. Briefly the facts of the present case are that the appellant is providing services under the category of Consulting Engineer and have obtained Service Tax Registration. On the basis of intelligence that the appellant did not discharge the service tax liability correctly and suppressed the value of taxable service to the Department, the Preventive Wing of the Commissionerate conducted the investigation. On scrutiny of the relevant documents viz. Balance Sheet, Profit and Loss Account, Invoice/Contract etc. it was revealed that apart from rendering Consulting Engineering services, the assessee provided a number of other taxable services for which no service tax was paid, in contravention of statutory provisions. Thereafter a show-cause notice dated 11.05.2005 was issued alleging that the appellants are rendering taxable service of Consulting Engineer Service, Erection, Maintenance or Repair Service, Commissioning Installation Agency Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consulting Engineer 13 Drawing Charges 2,86,74,425 22,48,654 Consulting Engineer 14 Erection, Commissioning charges 87,18,326 6,97,466 Erection, Commissioning Installation 15 Mechanical Commissioning charges 60,000 4,800 Erection, Commissioning Installation 16 Service charges towards supply of equipments 3,20,20,884 23,31,297 Consulting Engineer 17 Engineering Charges 3,08,01,351 17,71,431 Consulting Engineer 18 Earthing Philosophy 2,10,250 10,513 Consulting Engineer 19 Technical specification 11,76,000 94,080 Consulting Engineer 20 O M Manual 28,10,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported at 2015-TIOL-187-SC-ST wherein the Hon ble Supreme court has held that the service tax charging section itself must lay down with specificity that the levy of service tax can only be on works contracts, and the measure of tax can only be on that portion of works contracts which contains service element which is to be derived from the gross amount charged for the works contract less the value of the property in goods transferred in the execution of the works contract. The Hon ble Court further held that this machinery not being there in the Act, it was clear that any charge to tax under the five heads in Section 65(105), i.e., Sections 65(105) (g), (zzd), (zzh), (zzq) and (zzzh) would only be of service contracts simpliciter and not composite indivisible works contracts. The relevant portion of the judgment is as under: 15. A reading of this judgment [second Gannon Dunkerly judgment reported at (1993) 1 SCC 364], on which counsel for the assessees heavily relied, would go to show that the separation of the value of goods contained in the execution of a works contract will have to be determined by working from the value of the entire works contract and deducting therefro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in G.D. Builders V. UOI and Anr., reported at 2013-TIOL-908-HC-DEL-ST had observed and held as under: 41. We are afraid that there are several errors in this paragraph. The High Court first correctly holds that in the case of composite works contracts, the service elements should be bifurcated, ascertained and then taxed. The finding that this has, in fact, been done by the Finance Act, 1994 Act is wholly incorrect as it ignores the second Gannon Dunkerley decision of this Court. Further, the finding that Section 67 of the Finance Act, which speaks of gross amount charged , only speaks of the gross amount charged for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract. We find therefore that this judgment is wholly incorrect in its conclusion that the Finance Act, 1994 contains both the charge and machinery for levy and assessment of service tax on indivisible works contracts. 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17,71,431 14 Earthing Philosophy 10,513 15 O M Manual 1,40,400 16 Soil Investigation 1,49,900 Total 67,14,904 3.2. He further submitted that out of the total demand a sum of ₹ 23,31,297/- (Rupees Twenty Three Lakhs Thirty One Thousand Two Hundred and Ninety Seven only) has to be deducted because it is on account of goods supplied to ONGC and there is no service element in it and further a sum of ₹ 4,800/- (Rupees Four Thousand Eight Hundred only) has also to be deducted because it is wrong quantification in the main demand and therefore he submitted that no demand arises against the appellant. He also submitted that once after the judgment of Hon ble Supreme Court the appellant is not liable to pay any service tax, then the question of penalty and interest does not arise. 4. On the other hand the learned AR reiterated the findings in the impugned order. 5. After considering the submissions made by both the parties a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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