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TMI Blog2019 (11) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... es the services 'to be provided' and hence the service tax had to be paid on the advances also. Thirdly, it was also found that the appellant had paid some amounts towards "goods transport agency" service on which they were supposed to discharge the service tax liability under reverse charge mechanism which they have not done. Accordingly, a show cause notice was issued calling upon the appellants to explain:- (a) Why an amount of Rs. 1,07,12,000/- should not be demanded as Service Tax from them under "Erection, Commissioning or Installation Services". (b) An amount of Rs. 27,63,20,528/- should not be demanded from them as Service Tax under "Works Contract Service" (c) An amount of Rs. 96,79,347/- should not be demanded from them as Service Tax under "Site Formation & Clearance Service" . (d) An amount of Rs. 5,94,425/- should not be demanded from them as Service Tax under "Transport of Goods by Road service" under Reverse Charge Mechanism. (e) An amount of Rs. 81,39,131/- of irregularly availed CENVAT Credit should not be recovered from them under Section 73 of Finance Act, 1994 read with Rule 14 of CCR 2014. (f) Interest as applicable on the above should not be demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as has been held by the Hon'ble Apex Court in the case of Larsen & Toubro Limited [2015(39)S.T.R. 913 (S.C.)] is a separate specie of contract as known in the commerce and it cannot be equated either with a contract for supply of goods or a contract for provision of service simpliciter. Therefore the Hon'ble Supreme Court held that the charge for works contracts comes only w.e.f. 01.06.2007 when "Works Contract Service" has been inserted in Section 65(105). Prior to this date, it was not chargeable at all. Although the present period is post 01.06.2007, the charge on this account can only be done under the Works Contract Service, it cannot be done under some other heading. Merely because the works contract service has been made a taxable category post 01.06.2007, it does not automatically mean that it can also be charged under any other head after this date. It is a well settled principle that if a service is taxable under one or more categories, the appropriate category as per law has to be selected. As far as the composite work service is concerned, there is only one category in the service tax provision under which it can be charged. For this reason alone, the demand of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not get covered by the Goods Transport Agency Service also. As far as the interest on service tax liability on the mobilization advances received by them is concerned, he would submit that these are in the nature of mobilization advances and not in the nature of advance payment for the services. He would submit that the distinction between the two is when they get mobilization advance they have to either pay interest on the mobilization advance or submit a bank guarantee which is not done in advance payments. In their case, they have submitted a bank guarantee and interest was also charged by their customers and therefore this is nothing but a sort of loan given to them and not the payment made in advance for the services rendered. The amount was thereafter adjusted at the time of final settlement of bills and the service tax was duly paid. The case of the Revenue is that the appellant should have discharged the service tax as soon as they receive mobilization advances on the ground that it is an advance payment for the services. However, considering that they have given a bank guarantee and have also paid interest to their customers, the amounts received can only be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid part of service tax and declined to pay rest of it on the ground that the amount was paid by them to their suppliers who had availed the GTA services and not to any Goods Transport Agency itself. However, they have not produced any documents to substantiate this assertion and therefore the demand was confirmed on this ground. 11. As far as the interest payable on mobilization advances is concerned, he would assert that the appellant has received the payment for the services in advance and had not discharged the service tax liability on that date and therefore the interest on delay payment of service tax is correctly demanded. 12. On the question of limitation of time, he would assert that the appellant had not disclosed these details in their ST-3 returns and the matter came to light only when the department had conducted investigation. 13. We have considered the arguments on both sides to decide the issues. As far as the demand on the project for construction of floodlighting around Indo Bangladesh Border in the State of Tripura is concerned, it is evident from the records before us that the project was awarded by Ministry of Home Affairs to M/s Coastal Projects Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panel, FPBs etc. to be completed immediately after their arrival at site. 12. In case if there is any delay in route approvals of lines, erection of poles and stringing of lines shall be immediately brought to the notice of the headquarters of M/s Coastal Projects Pvt. Ltd., Hyderabad in writing, so that we take appropriate action to complete it. (13) If there is no work at site for a week time, M/s Vishwanath Projects, Hyderabad is authorized to take appropriate action which it deems fit. (14) Prices: Prices mentioned in the schedule of price (Annexure-II) are FIRM through the contract. (15) Any extra or additional items as required by NPCC have to be executed by M/s Vishwanath Projects Limited as per the agreement conditions. (16) Payment terms: All the payments will be made against the Bills raised/submitted to NPCC after deduction of all applicable taxes. M/s Vishwanath Projects Limited are eligible to get 96.65% of the cheque amount received from NPCC. DEDUCTIONS: 17. Applicable taxes will be deducted at source from the running account bills. Variations in statutory levies by the Government on the day of payment will be to the sub-contractor account i.e. T.D S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract. Composite works Contract involve both rendition of service and deemed sale/sale of the materials used in rendering such services. The Hon.'ble Apex Court has observed in the case of Larsen & Toubro (supra) that works contract is a separate specie of contract known to the trade and commerce distinct from a contract for supply of goods or a contract for supply of services. In view of the above, we have no hesitation in concluding that the contract in question is a composite works contract and could have been taxed only under the head of "Works Contract Services" post 01.06.2007. It is not in dispute that the entire period in question is post 01.06.2007. Therefore, the demand if any could have been raised under the Works Contract Service. The demand in this case has been made under Erection, Commissioning and Installation Service. ECIS does not include the contract where transfer of materials is involved. Since the demand has been raised under ECIS and the nature of contract does not fall under this category, the demand on this head it has to fail. Accordingly, the demand is set aside to this extent on this ground alone. 16. Ld. Counsel has also argued that since the flood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds transport agencies services which they had paid. The department's contention is that they have not produced any evidence to substantiate this fact. 20. It is seen from the show cause notice that the entire demand was raised only based on the records of the appellant indicating the freight expenses incurred by them. The department has no other evidence to show that the appellant had availed the services of GTA operators. Having accepted the appellants records, as far as the total freight expenses incurred are concerned, the department seems to reject their contention that part of the freight was towards the payments made to their vendors and not to GTA operators. We find such a position untenable. Either the department accepts the assessee's records and their statements or it should provide an alternative evidence. Having accepted the assessee's records that amounts have been paid towards goods transport, the department cannot reject the contention that a part of it was paid directly to their vendors and in the absence of any evidence to the contrary. In view of the above, we find that the contention of the department is not sustainable and the demand on this ground must also fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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