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TMI Blog2018 (10) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate amount of Service Tax. The Department accordingly started investigation and after conclusion thereof had issued a show cause notice dated 20th October, 2010 upon the appellant raising a demand of ₹ 12,56,44,634/- for a period of 2005-06 to 2009-2010. While adjudicating the said show cause notice the adjudicating authority below vide the order under challenge has confirmed the demand only for ₹ 1,34,66,803/- and rest of the amount has been dropped by the adjudicating authority. The appellant is aggrieved of the amount confirmed and resultantly has filed the present appeal. 2. We have heard Mr. Vipin Garg & Ms. Rinki Arora, ld. Advocates for the appellant and Mr. Vivek Pandey, ld. DR for the Department. 3. It is submitted on behalf of the appellant that the appellant is not liable to pay any Service Tax on the basis of the CBEC Circular No. 123/5/2010-TRU dated 24th May, 2010. The said Circular exempts all the activities of the appellant from the tax liability. It is submitted that the appellant has provided all the work contracts to the adjudicating authority below. Still the order has committed an error for not extending the benefit of the said Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the adjudicating authority has prepared consolidated summary on the basis of work executed during the period 2005-06 to 2009-10 and has divided the work done of the appellant into 29 categories for the year 2005-06, 47 categories for the year 2006-07, 74 categories for 2007-08, 54 categories for 2008-09 and 49 categories for the year 2009-10. Perusal thereof further shows that most of the categories of work, the demand thereof has been dropped. However, following are the categories of these year-wise work-orders, which are held taxable by the authority:- Sl.No. Broad Description of the work as per W.O. 1. Providing & Fixing of Street Lights on PCC Pole or otherwise i.e. work in relation to lighting on public utility road. 2. Electrification and Lighting 3. Shifting of overhead cables/ wires and laying of cables under or alongside roads for........... 7. Since the demand has been dropped giving the benefit of the Circular No.123/5/2010 dated 24th May, 2010, it is relevant to look into the same. It reads as under:- Subject: Applicability of service tax on laying of cables under or alongside roads and similar activities - clarification regarding. Disputes have ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a contract wherein the transfer of property in goods involved is leviable to a tax as sale of goods) rather than the nature of activities undertaken, that distinguishes it from the previously stated taxable services. Thus, even in the case of 'works contract' if the nature of the activities is such that they are excluded from aforesaid two services then they would generally remain excluded from this taxable service as well. (iv) 'site formation and clearance, excavation, earthmoving and demolition services' are attracted only if the service providers provide these services independently and not as part of a complete work such as laying of cables under the road 3. The taxable status of various activities, on which disputes have arisen Based on the foregoing, the following would be the tax status of some of the activities in respect of which disputes have arisen,- S.No. Activity Status 1. Shifting of overhead cables/wires for any reasons such as widening/renovation of roads Not a taxable service under any clause of sub-section (105) of section 65 of the Finance Act, 1994 2. Laying of cables under or alongside roads Not a taxable service under any clause of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed for the same is held to have wrongly confirmed. The same is therefore, held liable to be set aside. The order to that extent is upheld. Installation of sub-station is also taxable. The confirmation to that extent is also upheld. Cabling work for Railway for the electrification thereof has been made exempted from the tax liability as per entry 8 of the Circular. The adjudicating authority is held to have wrongly confirmed the said demand. The order to that extent is set aside. Resultantly, a minor demand qua entry No. 25 & 26 for the year 2006-07 and for entry No.47 for 2009-10 in the chart prepared by adjudicating authority below is held to have wrongly confirmed by the adjudicating authority, the same is hereby set aside. Rest of the adjudication while confirming demands and even while dropping the demand is found to have no infirmity. 9. Now coming to the benefit of Composition Scheme and cum-tax benefit, the work orders are perused. It becomes clear that these are not the work orders for the services simplicitor or for sale of goods simplicitor but involves both the elements in such a manner that the contracts are indivisible. As a result, the contracts are opined t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Advocate General for Maharashtra was right in his submission that the term "works contract" cannot be confined to a contract to provide labour and services but is a contract for undertaking or brining into existence some "works". We are also in agreement with the submission of Mr. K.N. Bhat that the term "works contract" in Article 366(29-A)(b) takes within its 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." 10. As a result, the service which is in the nature of Composite Work Contract cannot be put to tax before 1st June, 2007. Hence, the entire demand confirmed by the adjudicating authority for the period prior to 2007 is held to have wrongly confirmed. The same is hereby set aside. However, for the subsequent period, since the activity is work contract service and there is a Composition Scheme as per the provisions of Composition Rules issued under Notification 32/2007 dated 22nd May, 2007 vide which an option is available to pay Service Tax at the rate of 2 % upto 1st of March, 2008 and at the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve that the demand has been raised for the period w.e.f. 2005 to the year 2010, vide the show cause notice of 22.10.2010. The normal period for raising the demand is one year as per Section 73 of Central Excise Act. It is only in case of wilful suppression of facts, misrepresentation, collusion, fraud that too with intention to evade tax that the Department can invoke and extended period. In the present case, the main defence of the appellant is his reliance upon a Circular No. 123/5/2010 providing the exemption to most of his activities and that the same was the bonafide reason for him to not to pay the Service Tax. The alleged intention of tax evasion is therefore not apparent on the appellant. Though the Department has taken the plea that there is a clear recital in the order under challenge about the appellant to have been non-cooperative while providing the documents but the meticulous table in the order itself falsifies that argument and there is observed no other act of appellant on record of alleged non-cooperation. Otherwise also the activity was of composite nature and was not simplicitor of errection, commissioning or installation. Hence, appellant is held to have a ..... 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