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TMI Blog2019 (5) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be levied only on contracts simpliciter and not composite indivisible works contract. It is clear from the agreements entered into between the appellant and M/s. Nokia India Pvt. Ltd. and M/s. Ericson India Pvt. Ltd. that the contracts were indivisible works contract - In view of the decision of the Supreme Court, no levy of service tax could, therefore, be imposed prior to 1 June 2007. The appellant could not have been asked to discharge the service tax liability as no service tax could be levied on Works Contract Service prior to 1 June 2007. Service tax collected but not paid - HELD THAT:- Section 73 A of the Finance Act which came into effect from 18 April 2006, provides a complete answer to this issue. Section 73 A deals with service tax collected from any person to be deposited with Central Government. While sub section (1) deals with service tax collected in excess of the service tax assessed or determined, sub section (2) deals with any person who has collected any amount which is not required to be collected from any other person, in any manner as representing service tax. Sub section (2) in such a situation would be applicable. Such a person is required to fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intelligence gathered by the officers of the Anti Evasion Department of Central Excise Commissionerate, Jaipur-I. It was revealed that the appellant was doing Erection of Foundation of Tower and Commissioning and Installation of BTS of Mobile Towers for M/s. Nokia India Pvt. Ltd. and M/s. Ericsson India Pvt. Ltd. and for this purpose had entered into contracts with the aforesaid two parties and was receiving payment including Service Tax but was not depositing the Service Tax with the Department. The show cause notice further mentioned that from the nature of the services provided by the appellant, it appeared that it was engaged in Erection, Commissioning or Installation Services for which the Service Tax liability (inclusive of cess) for the period from 24 March 2006 upto 12 March 2008 would come to ₹ 1,58,74,210/-. The appellant was, therefore, called upon to show cause within 30 days of the receipt of the notice as to why: i. Service Tax amounting to ₹ 1,58,74,210/- (including Ed. Cess and HSE Cess) should not be recovered from them under proviso to Section 73 (1) of the Finance Act, 1994. ii. Interest on the above Service Tax amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o only) including Education and S H Education Cess and order it to be recovered from M/s. Shri Khandal Construction working (partnership firm from 21.03.2007 to 12.03.2008) or its partners Shri Sandeep Sharma, Kapil Taneja and Sher Singh Sunda jointly or severally along with interest in terms of Section 75 of the said Act. iii) I also impose a penalty of ₹ 1,29,41,548/- (Rs. One Crore Twenty Nine Lacs Forty One Thousand Five Hundred Forty Eight only) on M/s Shri Khandal Construction (proprietorship firm upto 20.03.2007) under section 78 of the Finance Act, 1994 which is liable to be recovered from the firm or its proprietor Shri Sandeep Sharma. However, benefit of reduced penalty of 25% as per proviso to Section 78 ibid, is available to them subject to the conditions that service tax demand of ₹ 1,29,41,548/- and the interest payable thereon under Section 75, is paid within thirty days from the date of communication of this order and further subject to the condition that the benefit of reduced penalty shall be available if the amount of penalty so determined has also been paid within the period of thirty days from the date of communication of this order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod from June 2005 to March 2007 and that it was only w.e.f. 01 June 2007, after introduction of work contract service, that tax was required to be paid under this category of service but the entity of the appellant ceased to exist since the firm was converted into a partnership firm. 6. Shri R.K. Manjhi, learned Authorised Representative of the Department, has however submitted that the appellant did not state in reply to the show cause notice that the work performed under agreement was in the nature of works contract and in fact the appellant itself had collected service tax under Erection, Commissioning or Installation Services. It has, therefore, been submitted that the appellant cannot now turn around and contend in this appeal that the actual service rendered by the appellant was Works Contract Service and not Erection, Commissioning or installation Service. In support of his submission learned Authorised Representative has placed reliance on the decision of this Tribunal in the case of Kamakhaya Steels Pvt. Ltd. Vs. CCE Meerut 2015 (317) ELT 67 (Tri-Del). 7. We have considered the submissions advanced by the parties. 8. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Further, under Section 67, as has been pointed out above, the value of a 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 contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. 25. In fact, by way of contrast, Section 67 post amendment (by the Finance Act, 2006) for the first time prescribes, in cases like the present, where the provision of service is for a consideration which is not ascertainable, to be the amount as may be determined in the prescribed manner. 26. We have already seen that Rule 2(A) framed pursuant to this power has followed the second Gannon Dunkerley case in segregating the service component of a w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on indivisible works contracts various exclusions are also made such as works contracts in respect of roads, airports, airways transport, bridges, tunnels, and dams. These infrastructure projects have been excluded and continue to be excluded presumably because they are conceived in the national interest. If learned counsel for the revenue were right, each of these excluded 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. 11. It is clear from the agreements entered into between the appellant and M/s. Nokia India Pvt. Ltd. and M/s. Ericson India Pvt. Ltd. that the contracts were indivisible works contract. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal has not considered the plea of the appellant that for the financial year 1999-2000 under Rule 96ZO(3) the option has (sic) required under sub-rule (3) of 96ZO has not been given by the appellant. 11. The Tribunal has not adjudicated that if the option has not been given for the 1999-2000 whether the appellant is liable for the payment of duty under Rule 96ZO. 12. On the aforesaid facts and circumstances we are of the opinion that this aspect of the matter requires consideration by the Tribunal afresh. 13. It is made clear that the matter is relegated only for the determination of the liability for the financial year 1999-2000 and not for any other year. 15. Though it is correct that the appellant at the stage of hearing before the Tribunal, after remand by the Allahabad High Court, raised an issue regarding maintainability of the proceedings as Rule 96(Z)(O) of Central Excise Rules as well as Section 3A of the Central Excise Act 1944 had been abolished, but the Tribunal refrained itself from examining the issue as the adjudication before the Tribunal was within the narrow campus in terms of the directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. 19. Section 73 B deals with interest on amount collected in excess. 20. Before the Adjudicating Authority, both the appellant and the Revenue contended that the nature of the service rendered by the appellant was Erection, Commissioning or Installation Service and it is by this order, in view of the decision of the Supreme Court in Larsen and Toubro, that the Tribunal is holding that the nature of service provided by the appellant is infact Works Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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