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TMI Blog2020 (4) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... under commercial or industrial construction service. Commercial or industrial construction Service - Construction of road inside BALCO, SECL, NTPC - HELD THAT:- It clearly shows that services provided in respect of roads, airports, railways, terminals, bridges, tunnels and dams have been excluded. The Commissioner has observed that the road should be a public road and not a private road. It is not possible to accept this distinction drawn by the Commissioner because the section does not draw a definition between a private road or a public road - This Tribunal in Rajendra Singh Bhamboo vs. Commissioner of Excise and Service Tax, Jaipur [2018 (4) TMI 772 - CESTAT NEW DELHI] . The Tribunal held that the definition does not specify the type of road and so the road cannot be restricted to a public road only. Thus, whether a road is for public utility or for the utility of an organisation, the benefit of the exclusion clause has to be given. Commercial or industrial construction service - Internal road construction work - Construction of CSEB Internal road - HELD THAT:- This issue has been discussed while dealing with the construction of road inside the premises of BALCO, SECL, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON BLE MR. C. L. MAHAR, MEMBER (TECHNICAL) Appearance Present for the Appellant: Shri B L Narasimhan and Ms. Shagun Arora, Advocates Present for the Respondent: Shri Radhy Tallu, Authorised Representative JUSTICE DILIP GUPTA: 1. This appeal has been filed for setting aside the order dated 25 March, 2014 passed by the Commissioner of Central Excise, Customs and Service Tax, Raipur the Commissioner to the extent that it has confirmed the demand of service tax of ₹ 7,84,82,764/- out of the total demand of ₹ 43,74,04,648/-proposed in the two show cause notices. The Commissioner has also ordered for recovery of interest under section 75 of the Finance Act 1994. 2. The details of the six heads under which the Commissioner has confirmed the demand of service tax are indicated in the chart below: S.No. Issue Amount of Service Tax 1. Handling/Transport charges received from South Eastern Coal Field3 and Mahanadi Coalfield Ltd4 for transportation of coal within mines. ₹ 3,00,17, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing various services during the period 2011-12. 5. The Appellant was called upon to show cause as to why: (i) Service Tax amounting to ₹ 28,46,18,032/- should not be recovered under the provisions of Section 73 of the Act. (ii) Interest at appropriate rate should not be charged and recovered under section 75 of the Act; and (iii) penalties should not be imposed under Section 76 (for period till 10.05.2008), 77 and 78 of the Act. 6. The Appellant filed a detailed reply to the two show cause notices mentioning therein that the allegation that the Appellant had not paid service tax was factually incorrect and that the show cause notices had been issued on assumptions and presumptions without any corroborative evidence. It was also pointed out that the extended period of limitation could not have been invoked, as there was neither any wilful mis-statement nor suppression of facts with intent to evade payment of tax. 7. The Commissioner, by order dated 25 March, 2014, confirmed the demand of service tax on the six heads noted above and dropped the demand under the remaining heads. 8. It will, therefore, be appropriate to deal with the aforesaid s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sportation of coal up to the point of dispatch are taxable under the category of Mining of Mineral , Oil and Gas Services. (emphasis supplied) 10. Learned Counsel for the Appellant has submitted that the Commissioner fell in error in coming to a conclusion that the activity of transportation of coal within mines would be leviable to service tax under the category of mining services . It has been submitted that a perusal of the agreement with SECL for transportation of coal shows that main activity undertaken by the Appellant is transportation of coal, which is actually performed by deploying pay loaders and tippers and personnel of the Appellant. The actual excavation, washing, crushing of coal was completed before transportation took place and the Appellant was only required to transport the coal from the coal heaps to the Railway Siding. Thus, the activity would be of transportation of coal and no service tax could be levied under mining services . The contract would also demonstrate that service tax was to be paid by SECL under GTA. It has also been pointed out that the Commissioner dropped the demand of service tax on transportation of coal by road outside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the respondent i.e. transportation of coal from the pit-heads to the railway sidings within the mining areas is more appropriately classifiable under Section 65(105)(zzp) of the Act, namely, under the head transport of goods by road service and does not involve any service in relation to mining of mineral, oil or gas as provided by Section 65(105)(zzzy) of the Act. 7. The reliance placed on the definition of the term 'mines under Section 2(j) of the Mines Act, 1952 does not assist the Revenue inasmuch as what would be indicated by the said definition is that a mine is not to be understood necessarily in respect of pit-heads of the mining area or the excavation or drilling underground, as may be, but also to the peripheral area on the surface. The said definition has no apparent nexus with the activity undertaken and the service rendered. (emphasis supplied) 14. The observation of the Commissioner run contrary to what was held by the Supreme Court in Singh Transport . 15. It is, therefore, not possible to sustain the confirmation of demand under this head. CONSTRUCTION OF SHOP CUM GODOWN FOR MANDI SAMITI 16. The findings recorded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport, terminals, bridges, tunnels and dams; 19. The taxable service under section 65 (105) (zzzq) has been defined to mean any service provided or to be provided to any person by any other person, in relation to commercial or industrial construction. 20. It is with effect from 01 June, 2007 that (zzzza) was inserted in section 65(105) of the Act in relation to execution of works contract . Taxable service under section 65(105)(zzzza) of the Act is defined as : 65(105)(zzzza) taxable service means any service provided or to be provided to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Explanation -For the purposes of this sub-clause, works contract means a contract wherein,- (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out,- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular is the deductions which are to be made under subparas (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 they are relatable to supply of labour and services, and the same goes for the profit that is earned by the contractor. These deductions are ordinarily to be made from the contractor s accounts. However, if it is found that contractors have not maintained proper accounts, or their accounts are found to be not worthy of credence, it is left to the legislature to prescribe a formula on the basis of a fixed percentage of the value of the entire works contract as relatable to the labour and service element of it. This judgment, therefore, clearly and unmistakably holds that unless the splitting of an indivisible works contract is done taking into account the eight heads of deduction, the charge to tax that would be made would otherwise contain, apart from other things, the entire cost of establishment, other expenses, and prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice Tax Appeal No. 768 of 2012 decided on 03 May, 2019, a Division Bench of this Tribunal examined whether the demand under composite contract could have been confirmed under erection, commissioning or installation service . After referring to the decision of Supreme Court in Larsen and Toubro, the Bench observed as under: 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 that the definition of ECIS in Section 65(105) (zzg) remained the same even after 01 June, 2007 when WCS was introduced. In the absence of any change in the definition of ECIS, the judgment of the Supreme Court in Larsen Toubro will apply to a period after 01 June, 2007 also. 16. The Appellant had undertaken the activity under a composite and indivisible works contract and by no means can it be said that it was a contract for Service simplicitor. In our opinion partial supply of material will not change the nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. 28. The definition of commercial or industrial construction has been reproduced above. It clearly shows that services provided in respect of roads, airports, railways, terminals, bridges, tunnels and dams have been excluded. The Commissioner has observed that the road should be a public road and not a private road. It is not possible to accept this distinction drawn by the Commissioner because the section does not draw a definition between a private road or a public road. 29. In this connection reliance can be placed upon a decision of this Tribunal in Rajendra Singh Bhamboo vs. Commissioner of Excise and Service Tax, Jaipur 2018 (4) TMI 772-CESTAT NEW DELHI. The Tribunal held that the definition does not specify the type of road and so the road cannot be restricted to a public road only. Thus, whether a road is for public utility or for the utility of an organisation, the benefit of the exclusion clause has to be given. The relevant portion of the decision is reproduced below; 2. In this case, the appellant had constructed approach and internal road for various parties namely, M/s. Ericson India Pvt. Ltd. Kukas, Jaipur, Textile Weaving Park Ltd., Shree Ceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A show cause notice bearing F. No. V(ST) 1533/ADC/BIL/2010/Adj/3733 dated 28,31,386/- on a taxable value of ₹ 4,07,18,869/- on a specific issue in respect of services rendered to NTPC (National Thermal Power Corporation), Seepat for construction of residential houses at their township, which was confirmed by Addl. Commissioner vide O-I-O No. 56/ST/ADC/Bil/2011 dated 31.03.2011. 18.2 Noticee contested that the demand involved in SCN dated 16.01.2013 is repetitive in nature to the tune of ₹ 4,07,18,869/-. On examination of the above documents, I find that out of the total taxable value i.e. ₹ 4,07,18,869/- only ₹ 4,01,03,325/- pertains to the period of 2007-08 to 2009-10 and remaining ₹ 6,15,544/- pertains to the period of 200607. Since the present demands are based on the gross turnover and the said value of ₹ 4,01,03,325/- covered in the past SCN is bound to be part of the gross turnover for the same period i.e. 2007-08 to 2011-12, I find that the argument of Noticee is correct but only to the tune of ₹ 4,01,03,325/- and accordingly I deduct the same from the total taxable value (included in the exempted value shown under the head of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced below: We have already explained the submission of learned Advocate in brief and as explained by him in this case, residential complex construction by the appellant is meant for use by the Income Tax department to provide the same on rent to the employees and, therefore, it is clearly covered by the explanation given for Personal use in the definition. In this case the CPWD has engaged the appellant for construction of residential complex for giving it on rent to the employees of Income Tax department and, therefore, this service cannot be included in the definition of residential complex services. It is basically the case of one department taking the help of another department to get the work done basically because of specialization of that department in preparing documents and get the work executed. 36. Thus, as the Appellant had constructed residential houses for employees of NTPC., the activity would not be subjected to levy of service tax. 37. The confirmation of demand under this head, therefore, cannot be sustained. HANDLING/ TRANSPORTATION OF COAL IN THE JPL PLANT AREA 38. The findings recorded by the Commissioner on this issue are as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rate/ Te in Rs. Value of work in lakh Rs. (a)(i) Hiring of pay loaders for mechanical transfer of ROM (P) coal into tippers 06.50 3000 06.50 42.25 (ii) Hiring of tippers for its transportation from Gevra Stock Heap J to Junnadih Rly. Siding No. 2 at Gevra Project Lead: 3-4 KMs (03.5KMs) 06.50 18.80 122.20 (b) (i) Hiring of pay loaders for mechanical Transfer of ROM(P) coal into tippers 01.50 3000 06.50 9.75 (ii) Hiring of tippers for its transportation from Gevra Stock Heap L M to Junnadih Rly. Siding No. 2 at Gevra Project Lead: 6-7 KMs (06.3 KMs) 01.50 31.40 47.10 TOTAL 221.30 The above rates are exclusive of Service Tax. (Value or Work: Rupees two crores/twenty one lakh/thirty thousand/only) 42. Cargo handling service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site service which may include various intermediary and ancillary services such as loading/unloading, packing/unpacking, transshipment, temporary warehousing. For the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of intermediary and ancillary services. In such a case, whether the intermediary or ancillary activities is to be treated as part of GTA service and the abatement should be extended to the charges for such intermediary or ancillary service? Clarification : GTA provides a service in relation to transportation of goods by road which is a single composite service. GTA also issues consignment note. The composite service may include various intermediate and ancillary services provided in relation to the principal service of the road transport of goods. Such intermediate and ancillary services may include services like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., which are provided in the course of transportation by road. These services are not provided as independent activities but are the means for successful provision of the principal service, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice provided for successful completion of the main service. The cost of transportation charge is ₹ 29.60 per ton of limestone quantity delivered to the crusher out of which the labour element is only ₹ 2.96 per ton. It is apparent that the essential feature of the service is transportation. Loading and unloading are ancillary / intermediate service provided in relation to transportation of goods, and such service would be Goods and Transport Agency Service. It cannot be Cargo Handling service as was found by the Commissioner. 45. It is, therefore, not possible to sustain the confirmation of demand under this head. 46. Thus, as none of the demands confirmed under the six heads can be sustained, they are set aside. 47. Learned Counsel for the Appellant has also submitted that the computation of demand under the aforesaid six heads is incorrect. According to the Appellant the demand under the aforesaid six heads comes to ₹ 5,90,69,053/- as indicated in paragraph 2 of this decision. The Commissioner has, however, confirmed an amount of ₹ 7,84,82,764/- under the impugned order. The submission is that once the impugned order holds the transactions to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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