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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 ..... 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 provider for such service rendered by him. 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 - thus, the contract is composite in nature rather being the contract for service sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Kumar and Miss Kritika, Ld. Advocates for the appellant and Mr. Vivek Pandey, Ld. DR for the Department. 3. It is submitted on the part of the appellant that the activity of the appellants was exclusively related to construction of metro corridor in as such they were entitled for service tax exemption under the category of Construction Services as per Circular No. 80/2004 dated 17.09.2004. It is also impressed upon that construction of tunnels and underground stations though amounts to construction but the construction of Railways are excluded from the taxability of Construction Services. Above all, they were advised by DMRC itself about no liability of theirs towards service tax which is why they did not even opt of getting themselves registered. The Ld. Counsel has also impressed upon that the scope of work is covered under one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed. 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 provided by the appellant are of the nature of work contracts as defined and taxable under Section 65(105) (zzzza) of the Act. The moot question therefore is about adjudicating the nature of services rendered by the appellants. For the purpose, the following definitions would be relevant: Erection, Commissioning or Installation (65) 39a means any service provided by a commissioning and installation agency, in relation to (i) erection, commissioning or installation of plant, [machinery, equipment or structures, whether pre-fabricated or otherwise]; or (ii) installation of (a) electrical and electronic devices, including wirings or fittings therefor; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air conditioning including related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly 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 provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contract simpliciter without having any element of property in goods to be simultaneously transferred i.e. the provision is not for composite work contracts. It will also be noticed that no attempt to remove the non-service element from the composite work contracts has been made by any of the aforesaid Sections by deducting from the gross value of work contract the value of property in goods transferred in the execution of a work contract. The Hon ble Apex Court in the case Larsen Toubro Ltd. Vs. State of Karnataka 2014 (1) SCC 708 has held as follows: In our opinion the term works contract in Article 366(29-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 from the contract of the appellant makes it clear that the scope of work is not confined merely to erection, commissioning or installation. It is also apparent that the nature of contract is such that erection, commissioning and installation part cannot be severed from rest of the contractual responsibility. This perusal makes it clear that the contract is composite in nature rather being the contract for service simpliciter. 8. The taxability of composite contracts was brought into tax net w.e.f. 01.06.2007 itself under the category of rendering services of work contract taxable under Section 65(105) zzzza of the Act. The Hon ble Supreme Court in the case Commissioner of Central Excise, Kerala Vs. L T Limited 2015 (39) S.T.R. 913(S.C.) has clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, commissioning and installation irrespective that the said service is taxable since 01.07.2003 but since the services rendered is classified as works contract and the work contract in respect of railways is excluded from the tax liability as per the statutory definition itself, no question of levy of any service tax on such contract arises. It was also clarified that it is a well settled legal position that metro work is nothing but railways work. 10. Now, coming to the final aspect of Show Cause Notice being barred by time, it is observed that the period in hand is w.e.f. April 2004 to September 2005. The Show Cause Notice was issued on 23.10.2009. The same is beyond the normal period of one year as mentioned in Section 73 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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