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TMI Blog2019 (6) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as 'ECI'). The Commissioner (Appeals), however, granted abatement of 67% of the gross value in terms of the Notification dated 01 March, 2006, under which 33% of the gross turnover constitutes the service portion. 2. The Appellant is engaged in providing and fixing of Diesel Generator Sets, Pumps to Government Departments. It was discharging Service Tax liability and filing ST-3 Returns under 'ECI' service, 'Management, Maintenance or Repair' service (hereinafter referred to as 'MMR'), and 'WC' service as contemplated under the Finance Act, 1944 (hereinafter referred to as the 'Act'). The period in dispute is April, 2010 to March, 2011 during which time the Appellant was registered as a Government contractor for CPWD, PWD and BSNL. The Appellant contends that under the various composite contracts, it supplied, installed, tested and commissioned Diesel Generator Sets and also performed other related miscellaneous works in Government buildings. It charged Service Tax only on the labour portion i.e 15% of contract value and discharged VAT/CST liability on the remaining 85% of the contract value. It claims to have paid Service Tax amounting to Rs. 2,25,653/- under 'WC' se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that no documentary evidence was placed on record. The Commissioner (Appeals), however, found that the category of service would be 'ECI' service, and granted abatement under the Notification dated 01 March, 2006. The relevant portion of the order contained in paragraph 12 of the order of the Commissioner (Appeals) is reproduced below : "12. ......................... I find that in para 6 of the impugned order it is mentioned that the proprietor of the appellants company i.e. Sh. R.P. Bagga, in his statement dated 08.04.2010 recorded under Section 14 of the Central Excise Act, 1944 made applicable to Service Tax matters under the provisions of Section 83 of the Finance Act, 1994 has stated that "he understands that the activities of his company are covered under "Commissioning & Installation service" on which service tax was/is to be paid on labour portion (excluding value of material involved)". Even in their appeal memorandum, the appellants have argued that the amount includes the value of goods which are used during the process of providing the services and in their support they have produced an affidavit stating that they have not received any free supply of service recip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in to be taxed for which the matter needs to be remanded to the Adjudicating Authority for a fresh determination. It has also been submitted that it was obligatory on the part of the Appellant to have supplied all the relevant documents to the authorities so as to even have enabled it to determine the nature of services. 9. We have considered the submissions advanced by the learned Chartered Accountant for the Appellant and Shri Vivek Pandey, learned Authorized Representative of the Department. 10. It is no doubt true that the show cause notice was issued to the Appellant for two categories of service, namely, (i) 'ECI' service, and (ii) 'MMR' service. The Adjudicating Authority has confirmed the demand under 'ECI' service, and 'MMR' service, but the Commissioner (Appeals) has confirmed the demand under 'ECI' Service only and there is no cross appeal by the Department. 11. It would be necessary to first deal with the submission advanced by the learned Counsel for the Appellant that in view of the nature of the activities that were required to be undertaken by the Appellant in terms of the Agreement, the service rendered by the Appellant would fall in the category of 'WC' Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;" 15. The Commissioner (Appeals) in paragraph 12 of the order that has been reproduced above, has noticed that goods were supplied by the Appellant and it is for this reason that the benefit of abatement under the Notification dated 01 March, 2006 was given to the Appellant. In such circumstances, it is clear that the Appellant has also provided goods and it is for this reason that only 33% of the gross turnover relating to the 'service' portion was taxed and no tax liability was imposed on the remaining 67%. 16. The Supreme Court in Larsen & Toubro examined as to whether 'WC' service can be classified under Section 65(105)(zzd) relating to 'ECI' service and held that the scope of Section 65(105) (zzd) is limited to cover contract of service simplicitor only and not 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. Thus, w.e.f. 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the gross amount charged for the works contract less the value of property in goods transferred in the execution of the works contract. This not having been done by the Finance Act, 1994, it is clear that any charge to tax under the five heads in Section 65(105) noticed above would only be of service contracts simpliciter and not composite indivisible works contracts. xxxxxxx xxxxxxx xxxxxxx 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works 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 contracts simpliciter without any other element 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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