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TMI Blog2022 (2) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... as mentioned elsewhere. Further probe of facts show that one Shri Anand Mathur runs a consultancy business in the name and style of M/s. Rajlaxmi International Corporation and the assessee seeks his service to represent it in India for its project in India. The assessee executes projects i.e. supply, erection and commission of desulphurization plant on turnkey basis through international competitive bidding process. The role of the RIC Shri Anand Mathur, representative, was by and large to find a project partner for the assessee to undertake the supply and erection of indigenous components. Besides, RIC is engaged for the liasoning service of the project on behalf of the assessee who neither intended nor empowered to conclude a project on behalf of the assessee. On careful appreciation of facts, we are of the considered view that RIC is an independent consultant to provide certain liasoning service. In fact, the project is executed jointly by the assessee and its consortium partner in India M/s. Beekay Engineering Corporation In the case of RINL, consortium partner M/s. Beekay Engineering Corporation is 78% of the contract value and in the case of the contract with SAIL [Bhilai St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marily for the North American Steel Industry. Products are generally used by steel companies to improve their iron desulfurization. 7. During the year under consideration, the assessee earned Revenue from Rashtriya Ispat Nigam Limited [RINL] and from Steel Authority of India Limited [SAIL]. The assessee company has undertaken the following two projects during the year: (i) Project with SAIL for design and engineering supply of drawings and equipment's, supply of plant and equipment's including commissioning of spares, foreign supervision, training of personnel in India, ocean freight, etc. (ii) Project with RINL for technology design, engineering of hot metal desulphurization plant SMS-2 complete in all respects for imported portion on discrete turnkey basis. 8. The assessee filed NIL return of income as it believed that no part of its income from engineering supply is taxable in India. 9. The Assessing Officer was carried away with the Service Agreement between the assessee and Rajalaxmi International Corporation [RIC] dated 01.02.2005 and formed a belief that RIC forms DAPE of the assessee. 10. A perusal of the assessment order shows that, after extracting the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chester Road, Avon, Ohio 44011-02339 23/03/2009 TATA Steel UK Consulting Limited 30 Millbank, London, SW1P 4WY, UK 21/04/2011 3 Schenck Process India Limited Plot Nos. 67-82, Tupudana Industrial Area (New), Hatia 03/02/2012 4 Barnes Group Inc. 10367 Brecksville Road, Brecksville, OH 44141 19/07/2013 5 McKeown International Inc. 1106, South Mays, Suite 100, Round Rock, TX 78664, USA 15/01/2014 6 Technosulphur Sistema De Tratamento De Metais Liquidos S. A Rua 1° de Junho, 2,000, Bairro Vale Das Palmeiras, Sete Lagoas, Minas Gerails, CEP 01/02/2014 15. It can be seen that RIC is also engaged with other persons. Therefore, it can be safely concluded that RIC was not dependent on the assessee for its finances. On the contrary, it was just engaged in its individual capacity vide Sales and Representative Agreement to assist the company in supply of the services/products to customers, in performing the final performance tests and in final settlement of the companies contractual obligations under contract, if required by the company. It would be apt to refer to the part of the contract which reads as under: "Representative shall at all-time act as an independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32,00,000 Supply of Plant & Equipment a) Imported (FOB) (Refer '['able - 3) 1,988,580 - b) Indigenous (At site) (Refer fable - 4) - 16,80,00,000 3 Supply of Refractories (At site) a) Imported (FOB) (Refer 'fable - 5) b) Indigenous (At site) (Refer fable - 6) Inch in 2b 4 Supply of Commissioning Spares a) Imported (FOB) (Refer 'fable - 7) 14,300 b) Indigenous (At site) (Refer Table - 8) - Inch in 2b • 5 Civil Engineering Work including Supplies (Refer Table - 9) 6,04,67,000 6 Supply of Fabricated Building Steel Structures at site including Sheeting, Glazing and Shop Painting (Refer Table - 10) - 3.00,00.000 7 Erection of Building Steel Structures including Sheeting, Glazing and Final Painting (Refer Table 30,00,000 8 a) Erection of Refractories Incl. in 9 b) Works Contract Tax on Erection of Refractories (Refer Table-11) Inch in 9 9 Storage, Handling, Erection, Commissioning, and P. G. tests of Plant & Equipment (Refer Table -11) 1,50,00,000 10 Eoreign Supervision Charges in India during Erection, Start-up, Commissioning and P. G. Tests(Refer Table - 12) 72,000 11 Training Charges (Refer Table - 13) 24,000 12 Ocean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which prices are quoted in Foreign Currency) and Insurance after CIF delivery till delivery at site NA 500,000 14 Total Contracts Priee(l to 13) 1,785,261 270640000 15 CENVAT credit (refer clause 23.13 of GCC) 15.1 Excise Duty including education 33,700,000 15.2 Counter veiling Duty (CVD) including Education cess Structures at site including Sheeting, Glazing and Shop Nil Nil 15.3 Input Tax Credit(ITC) on APVAT Nil Nil 16 Contract Price (Net of CENVAT ITC) 1,785,261 236,940,000 Applying an exchange rate of 44.30/USD whereas the value of supply by/ESM is ₹ 7.78 Crore (USD 17,56,261 X 44.30), the value of supply, services and erection done by the consortium partner Beekay Engineering Corporation is ₹ 27.06 Crore accounting for 78% of the Contract value." 20. A perusal of the above two contracts shows that in the case of RINL, consortium partner M/s. Beekay Engineering Corporation is 78% of the contract value and in the case of the contract with SAIL [Bhilai Steel Plant], the value of supply services and erection done by the consortium partner is 69%. 21. Considering the facts of the case in totality and in appreciation of the agreement with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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