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TMI Blog2018 (9) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem by procuring the design, execution and completion and remedying any defects in the works of civil engineering contraction, mechanical and electrical installation of the station (including tunnel ventilation and station area conditioning and ventilation) and tunnel infrastructure and buildings. On an information, Department observed that appellants are engaged in erection and commissioning of mechanical and electrical installation, tunnel ventilation and station air conditioning and ventilation. Hence, Department alleged that the appellant were involved in evasion of service tax in relation to the said contracts with DMRC by not discharging their liability for providing services as that of erection, commissioning and installation. Resultantly, a Show Cause Notice No. 4392 dated 23.10.2009 was served upon them raising a demand of Rs. 10,63,35,945/- along with appropriate interest and the proportionate penalties under Sections 76, 77 and 78 of the Finance Act, 1994 (The Act). The said demand was confirmed vide the Order under challenge with the imposition of interest and such penalties as mentioned therein. Being aggrieved is the present Appeal. 2. We have heard Mr. Vishal Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the services provided by the appellants squarely fall under the definition of Erection, Commission or Installation Service as defined under Section 65(105) 28 of the Act. The said services are taxable since 01.07.2003. Impugned period of dispute is April 2004 to September 2005. Resultantly, there is no infirmity confirming the demand for rendering the said services. It is further impressed upon that vide the impugned Show Cause Notice, the construction of station building or other civil structures has not been taken as a part it is only that portion of one work contract which is related to installation and commissioning that has been incorporated and the demand in accordance thereof has rightly been invoked and confirmed denying all the allegations and the grounds of Appeal. Ld. DR has prayed for the Appeal to be allowed. 5. After hearing both the parties we are of the opinion as follows:- The demand as has been confirmed against the appellant is confirmed for providing Erection, Commissioning or Installation Services defined under Section 65(39a) taxable under Section 65(105) (zzd) of the Finance Act, 1994 (the Act). Whereas the appellant's case is that the services prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rimarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;" 6. The bare perusal of the above definitions makes it clear that the Erection, Commissioning or Installation is one of the activity for the impugned contract which is composite in nature, i.e. having other services, in addition, to be simultaneously provided for. A close look at Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contract simpliciter and not to the composite work 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 contract simpliciters without any other element in them. Further, under Section 67 of the Act, the value of taxable service is the gross amount charged by the service prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts fold all genre of works contract and is not restricted to one specie of contract to provide for labour and services alone. Parliament had all genre of works contract in view when clause (29-A) was inserted in Article 366." 7. In the case before us, there is a contract (Design and Construct Contract) by Delhi Metro Rail Corporation in favour of the appellants for the design and construction of a rail based mass rapid transport system by procuring the design, execution and completion and remedying any defect in the works of civil engineering, construction, mechanical and electrical installations of the stations (including tunnel ventilation and station air conditioning and ventilation) and tunnel infrastructure and buildings. The perusal of contract shows that it was the obligation of appellants only to supply/provide all equipments, materials, labour and other facilities requisite for and incidental to the successful completion of the works and in carrying out all duties and obligations imposed by the contract documents. Further perusal makes it clear that valuation of the cost of works was agreed to be the total cost for the work carried out by the appellants. These perusal fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et Cotton Textile Mills Vs. Chief Commercial Superintendent 1998 (5) S.C.C. (126) wherein the Hon'ble Apex Court has held that Delhi Metro Rail is a Government railway as defined in Indian Railway Act. Since Railway also is meant to run on commercial basis, DMRC cannot be distinguished from being called as railways merely on the ground that it involves a commercial angle. This decision has been followed by Hon'ble Delhi High Court as well in the case of DMRC itself titled as DMRC Vs. Municipal Corporation of Delhi 2008 (103) DRJ 369. Hon'ble High Court Karnataka in the case DMRC Vs. Ministry of Finance 2013 (6) T.M.I. 78 has also held that work contract services in respect of railways are excluded under Clause 1 of 65(105) zzzza of the Act i.e. such contracts will fall outside the definition of taxable service and consequently no tax shall be leviable under Section 66 of the Act on the value of such services. This Tribunal in the case M/s IRCON International Ltd. Vs. C.S.T. Delhi 2017 (4) T.M.I. 1086 (Tri.-Del.) [IRCON is one of the company constituting the joint venture i.e. the appellant] has held a composite work contracts irrespective include the category of service of erection ..... X X X X Extracts X X X X X X X X Extracts X X X X
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