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TMI Blog2019 (6) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the demand made under a particular category of service found to be incorrect in a subsequent proceeding, cannot be sustained. The issue that needs to be examined now is that though the Adjudicating Authority was not justified in confirming the demand under ECIS, but the appellant had admittedly collected Service Tax. The appellant is also not contesting that it is not required to deposit the Service Tax collected with the Department but what is sought to be contented is that the appellant had in addition to the amount that has been appropriated in the impugned order, deposited an amount of ₹ 16,614,934/- with the Department, (details of which have been mentioned at page 262 of the appeal memo.), which amount has not been considered by the Adjudicating Authority and, therefore, not appropriated. The confirmation of demand under heading ECIS with interest and penalty is set aside - The demand made under Goods and Transport Agency Service is maintained. So far as the appropriation of the amount is concerned, the matter is remanded to the Adjudicating Authority for passing a afresh order. Appeal allowed in part. - Service Tax Appeal No.768 OF 2012 - Final Order N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same under Transport of Goods by Road Services . The show cause notice, therefore, called upon the appellant to show cause as to why: (i) The service tax amounting to ₹ 2,52,82,721/- [Rupees Two crores, Fifty Two Lakhs, Eighty Two Thousand, Seven Hundred Twenty One only [ Service Tax: ₹ 2,46,16,901/-+ Education Cess: ₹ 4,92,338/-+Higher Education Cess: ₹ 1,73,481/-] during the period 2005-06 to 2009-10, should not be demanded and recovered from them towards the taxable service viz, erection, commissioning or installation services, under Section 73 of the Finance Act, 1994, by invoking extended period of limitation as per clause (a)/proviso, as the case may be, to sub-section (1) of said Section 73. The amount of Service Tax ₹ 69,14,934/- already paid by them should not be appropriated against the said demand. (ii) The service tax amounting to ₹ 1,14,221/-[Rupees One Lakh, Fourteen Thousand Two Hundred and Twenty One Only] [Service Tax: ₹ 1,11,268/-+ Education Cess: ₹ 2,225/- + Higher Education Cess: ₹ 728/-] during th period 2005-06 to 2009-10, should not be demanded and recovered from them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een thousand two hundred twenty one only) and order for recovery from the Noticee in terms of Section 73 of the Finance Act, 1994. iii. I order for recovery of interest on the amount confirmed for recovery, in terms of Section 75 of the Finance Act, 1994. iv. I impose a penalty of ₹ 2,53,96.942/-(Rs. Two crores fifty three Lakhs ninety six Thousand nine Hundred forty two only) on the Noticee under Section 78 of the Finance Act, 1994. v. I impose a penalty of ₹ 200/- for every day during the failure continues, starting with the first day after the due date to actual date of compliance in terms of Section 77 of the Finance Act, 1994. 6. Shri Krishnamohan K. Menon, learned counsel for the appellant has submitted: i. That the contracts with M/s Suzlon Infrastructure Services Ltd. were composite works contract and, therefore, the Adjudicating Authority could not have confirmed the demand under ECIS for the period prior to 01 June, 2007 in view of the decisions of the Supreme Court in Commissioner of Central Excise, Kerala v/s Larsen Toubro Ltd. reported in 2015 (39) STR 913 (SC) and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial was supplied by M/s Suzlon Infrastructure Services Ltd. and that invoices had been issued both for supply of goods and labour charge for erection, commissioning and installation of the goods. 10. It would be appropriate to refer to the various provisions of the Act. Section 65(39a) of the Finance Act defines Erection, Commissioning or Installation to mean: 65(39a) - erection, commissioning or installation 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 therefore; or (b) Plumbing, drain laying or other installations for transport of fluids; or (c) Heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cover contract of service simplicitor only and not a composite works contract. The Supreme Court noticed that it is only w.e.f 01 June, 2007 that Section 65(105)(zzzza) was introduced to cover composite works contract and so works contract cannot be covered under any other category of services prior to 01 June, 2007. The relevant portion of the judgment is reproduced below : 15. A reading of this judgment, on which counsel for the assessees heavily relied, would go to show that the separation of the value of goods contained in the execution of a works contract will have to be determined by working from the value of the entire works contract and deducting therefrom charges towards labour and services. Such deductions are stated by the Constitution Bench to be eight in number. What is important in particular is the deductions which are to be made under sub-paras (f), (g) and (h). Under each of these paras, a bifurcation has to be made by the charging Section itself so that the cost of establishment of the contractor is bifurcated into what is relatable to supply of labour and services. Similarly, all other expenses have also to be bifurcated insofar as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. 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. 14. It is, therefore, clear from the aforesaid judgment of the Supreme Court in Larsen Toubro that a Composite Works Contract cannot be taxed under CCS under Section 65(105) (zzzh) as the scope is limited to cover contract of service simplicitor only. This would also apply to ECIS. 15. What is also important to note is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is what was also observed by the Supreme Court in Reckitt Colman of India in paragraph 3 of the judgment which is reproduced below : 3. It will be remembered that the case of the Revenue, which the appellant had been required to meet at every stage from the show cause notice onwards, was that the said product was a preparation based on starch. Having come to the conclusion that the said product was not a preparation based on starch, the Tribunal should have allowed the appeal. It was beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet. It is upon this ground alone that the appeal must succeed. 19. The decision of the Mumbai Tribunal in Ashish Ramesh Dasarwar vs Commissioner of Central Excise Service Tax, Nagpur, reported in 2017-TIOL-3230-CESTAT-MUM, also needs to be referred. The Division Bench of the Tribunal held as follows : 6. As regards the period after 1.6.2007, since the demand was raised under commercial or industrial construction service, whereas admittedly the servic ..... 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