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TMI Blog2017 (9) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... se here, cannot be exigible to tax till such service was brought under the tax net with effect from 01.07.2006 - appeal dismissed - decided against Revenue. - ST/00171/2009 - Final Order No. 41239/2017 - Dated:- 17-7-2017 - Smt. Sulekha Beevi C.S, Member (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) For the Appellant Shri A. Cletus, ADC (AR) For the Respondent Shri S. Viswanathan, Adv. ORDER The fact of the matter is that the respondents were providing 'design and engineering drawing' as required by their customers and to set up 'Cathodic Protection System' to long distance pipelines to protect them against corrosion. It appeared that the work entrusted and executed involved complete supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired for the purpose of existing 'Corrosion Protection System' would be covered under the term equipments . Since commissioning or installation of all equipment are covered under ECIS from 01.07.2003, the Commissioner has erred in deciding the matter in favour of the respondents. 4. On the other hand, the learned Advocate Shri S. Viswanathan submits that for the period of dispute is from 01.07.2003 to 31.03.2006, and in view of the law laid down by the Apex Court in the case of Commissioner of Central Excise Customs, Kerala Vs Larsen Toubro Ltd. reported in 2015 (39) S.T.R. 913 (S.C) , this activity performed by them being in the nature of Works Contract will not become taxable till 01.07.2006. In response, learned autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Supreme Court's judgment are reproduced below:- 24 . A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down in the second Gannon Dunkerley case including apportionment of the cost of establishment, other expenses and profit earned by the service provider as is relatable only to supply of labour and services. And, where value is not determined having regard to the aforesaid parameters, (namely, in those cases where the books of account of the contractor are not looked into for any reason) by determining in different works contracts how much shall be the percentage of the total amount charged for the works contract, attributable to the service element in such contracts. It is this scheme and this scheme alone which complies with constitutional requirements in that it bifurcates a composite indivisible works contract and takes care to see that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluded works contracts could be taxed under the five sub-heads of Section 65(105) contained in the Finance Act, 1994. For example, a works contract involving the construction of a bridge or dam or tunnel would presumably fall within Section 65(105)(zzd) as a contract which relates to erection, commissioning or installation. It is clear that such contracts were never intended to be the subject matter of service tax. Yet, if learned counsel for the revenue is right, such contracts, not being exempt under the Finance Act, 1994, would fall within its tentacles, which was never the intention of Parliament. 7. Viewed in this light, no merit is found in the appeal filed by the Revenue, for which, the same is required to be dismissed, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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