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TMI Blog2019 (4) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... it emerged that appellants were engaged in various projects; that the activities performed by them were exigible to service tax liability being taxable services; that, however, service tax had not been appropriately discharged on the said services. 3.1 Accordingly, a Show Cause Notice dated 20.10.2009 was issued to the appellants inter alia proposing total demand of service tax of Rs. 6,20,49,021/- with interest thereon and imposition of penalties under various provisions of law. In adjudication, vide the impugned Order dated 13.12.2010, the Commissioner inter alia confirmed a total amount of Rs. 2,52,28,175/- with interest thereon, imposed equal penalty under Section 78 of the Finance Act, 1994 and also imposed penalty under Section 77 ibid. The said amount demanded was in respect of the following categories: I. Commercial or Industrial Construction Service (CICS): Rs. 1,49,03,908/- II. Erection, Commissioning and Installation Service (ECIS): Rs. 45,88,522/- III. Interior Decorator Service: Rs. 18,01,084/- IV. Construction of Residential Complex Service: Rs. 39,34,661/- 3.2 Hence, Appeal No. ST/163/2011. Appeal No. ST/164/2011 filed by the Department: 4. The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ratio laid down by the Tribunal in the case of M/s. Power Mech Projects Ltd. Vs. Commissioner of Customs, Guntur - 2017 (48) S.T.R. 165 (Tri.- Hyd.) D. Project Name: SIPCOT, Perundurai (i) Work involved: Construction of infrastructural building in EPIP, Gummidipoondi. (ii) Amount of Service Tax demanded: Rs. 4,25,660/- (iii) Ground for confirmation in the impugned Order: The submission of the assessee that the projects are completed before introduction of the impugned service before 10.09.2004 has been rejected by the adjudicating authority in paragraph 15.08.03 on the ground that the payment was received after 01.03.2005. (iv) Defence: Abatement of 67% has been allowed to the assessee. The project is therefore a composite contract. Hence, the ratio laid down in the cases of M/s. Larsen & Toubro Ltd. (supra) and M/s. Real Value Promoters Pvt. Ltd.(supra) will apply. So also, for the same project, demand has been made under Works Contract in Appeal Nos. ST/40215/2013 and ST/42305/2017 for the period 2012-14. E. Project Name: KSR (i) Work involved: Construction of civil and structural work at Summer Indian Textiles Mills Pvt. Ltd. (ii) Amount of Service Tax demanded: Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore a composite Works Contract. Hence, the ratio laid down in the cases of M/s. Larsen & Toubro Ltd.(supra) and M/s. Real Value Promoters Pvt. Ltd.(supra) will apply. I. Project Name: VPR (i) Work involved: Construction of civil work for Virapandi Common Effluent Treatment Plant at Tiruppur. (ii) Amount of Service Tax demanded: Rs. 11,78,476/- (iii) Grounds for confirmation in the impugned Order: The adjudicating authority in paragraph 15.06.04 has stated that the effluent plant is for treating industrial pollution and being paid for by industrial units. Hence, it is treated as industrial purpose and taxable. (iv) Defence: Abatement of 67% has been granted to the assessee. The activity is therefore a composite Works Contract. Hence, the ratio laid down in the cases of M/s. Larsen & Toubro Ltd. (supra) and M/s. Real Value Promoters Pvt. Ltd.(supra) will apply. II. Erection, Commissioning and Installation Service: A. Project Name: TWAD-LAKKA (i) Work involved: Erection and Commissioning of Common Water Supply Scheme (CWSS) for habitations. (ii) Amount of Service Tax demanded: Rs. 2,79,001/- (iii) Ground for confirmation in the impugned Order: The adjudicating authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Installation Service (ECIS). (iv) Defence: Abatement of 67% has been granted to the assessee. The activity is therefore a composite Works Contract. Hence, the ratio laid down in the cases of M/s. Larsen & Toubro Ltd.(supra) and M/s. Real Value Promoters Pvt. Ltd.(supra) will apply. E. Project Name: MTP (i) Work involved: Erection and commission of CWSS to 110 habitations for various villages. (ii) Amount of Service Tax demanded: Rs.21,50,548/- (iii) Ground for confirmation in the impugned Order: The adjudicating authority has rejected the contention of the assessee that it can be classified as Works Contract Service. (iv) Defence: Abatement of 67% has been granted to the assessee. The activity is therefore a composite Works Contract. Hence, the ratio laid down in the cases of M/s. Larsen & Toubro Ltd.(supra) and M/s. Real Value Promoters Pvt. Ltd.(supra) will apply. F. Project Name: HCC (i) Work involved: Construction of intake raw water pumping station for the Tirupur bulk water supply project. (ii) Amount of Service Tax demanded: Rs. 1,90,208/- (iii) Ground for confirmation in the impugned Order: The adjudicating authority in paragraph 16.04 has rejected the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope. B. Project Name: PUZHAL (i) Work involved: Beautification work of landscape. (ii) Amount of Service Tax demanded : Rs. 4,39,264/- (iii) Ground for confirmation in the impugned Order : The adjudicating authority in paragraph 17.03 has rejected the plea that service tax under Interior Decoration Services are leviable only to the person who was engaged in business of providing by way of advice, consulting, technical assistance or any other manner relating to planning, design or beautification of space, whether man made or otherwise, including a landscape designer. (iv) Defence : The assessee has provided only civil work and has not provided any advice, consulting, technical assistance, etc., with regard to Interior Decoration. The phrase "any other manner" in the definition cannot have an unlimited scope. IV. Construction of Residential Complex Service : A. Project Name : PPH (i) Work involved : Construction of 161 quarters for police personnel at Pochampalli, Krishnagiri district. (ii) Amount of Service Tax demanded : Rs. 19,76,104/- (iii) Ground for confirmation in the impugned Order : The adjudicating authority in paragraph 18.03 has stated that the Police Hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand in respect of MAHE, Ld. AR reiterated the conclusions of the adjudicating authority that Indoor Stadiums are very often given for rent such as for use in public function, organizing major events, entertainment programmer etc., thus generating income. Hence, this is only for commercial purpose by the Government. For this reason, paragraph 13.2 of the Board Circular No. 80/10/2004-ST dated 17.09.2004 will apply in full force and service tax is very much required to be discharged by the assessee for this project. 6.4 With regard to the argument of the Ld. Advocate that in some cases, the tax has been paid by the main contractor, Ld. AR submits that in the first place, no evidence has been put forward by the assessee to prove that the tax liability has indeed been discharged by the main contractor. Further, even it has been so discharged, the assessee would still be liable to discharge their service tax liability as per the ratio laid down in the cases of M/s. G.D. Builders (supra), M/s. BCC Developers and Promoters Pvt. Ltd. (supra) and M/s. National Building Construction Corporation Ltd. (supra) relied upon by the Ld. AR. Reliance has also been placed on the Circular No. 96 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the service tax liability of the aforesaid four projects. Alternatively, he should have kept the proceedings in respect of the aforesaid four projects in abeyance; (iii) As regards services pertaining to paragraph 3.01.02 (2) [MGS] of the Show Cause Notice dated 20.10.2009, the demand of service tax has been dropped on the ground that the project executed for M/s. TXEB was completed prior to the introduction of service tax on "Commercial or Industrial Construction Services" and further, that the service receiver, a statutory body formed under the Electricity Supply Act, 1948 was performing a "Public Utility Service" and hence, not liable to service tax as per paragraph 13.2 of the Board Circular No. 80/10/2004-ST dated 17.09.2004; (iv) There is no documentary evidence on file to establish that the said project was completed before the introduction of "Commercial or Industrial Construction Services" with effect from 16.06.2005. The certificate dated 04.12.2000 issued by the Commercial Tax Officer, Erode produced by M/s. RPP is not relevant to this project. The Circular No. 80/10/2004-ST dated 17.09.2004 has been withdrawn vide Circular No. 96/7/2007-ST dated 23.08.2007. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n file it is seen that the letter dated 10.08.2008 issued by M/s. PV Technologies India Ltd. to the noticee is for the construction of site office building at the Chennai plot of M/s. PV Technologies India Ltd. There is no evidence available on record to show that the construction activity was undertaken at SEZ, Chennai for which exemption is claimed. The Commissioner ought to have verified the premises to which the services were actually provided before dropping the demand. Thus the decision of the Commissioner in dropping the aforesaid demand is not correct; Erection, Commissioning or Installation Services : (i) In respect of services pertaining to paragraphs 3.02.01 (2) [KTP], 3.02.01 (3) [MGS-PESI and 3.02.01 (8) [KTP] of the Show Cause Notice, the demand of service tax has been dropped on the grounds that the services were rendered prior to the introduction of "Erection, Commissioning or Installation Services" which was introduced with effect from 10.09.2004. However, from the respective completion certificates available on file, it is seen that the date of completion of the aforesaid three projects were 02.04.2005, 31.07.2005 and 02.04.2005 respectively; (ii)From the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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