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TMI Blog2022 (9) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... ct service lies on the absence of supply of material insofar as the former is concerned. It is seen from the sample contracts that respondent herein was also responsible for supply of material on which tax has been claimed to have been discharged; in the absence of any controverting of this submission, or contrary evidence, the taxable service within which the respondent was sought to be fitted would not apply. On examination of fitment within the claimed enumeration of works contract service , it is found that the respondent was involved in the shifting of the existing water pipelines belonging to Delhi Jal Board which, by implication, ultimately is rendering of services to that agency which the grounds of appeal admits to being eligible for exclusion from tax. In terms of the decision of the Hon ble High Court of Madras in M/s Indian Hume Pipes Co Ltd, [ 2015 (9) TMI 479 - MADRAS HIGH COURT] the laying of pipelines as an adjunct of civil structure would alone bring the activity within the ambit of section 65 (105) (zzd) of Finance Act, 1994 and from the nature of the work undertaken, it is apparent that the activity contracted out by the respondent does not relate to civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober 2011 for recovery of ₹ 14,05,90,649/- on the same services for 2010-2011 also. M/s LR Sharma Co, a partnership firm and respondent in the appeal, had filed memorandum of cross-objections. Though the notices pertained to three taxable services rendered by the respondent herein, appeal against order of the adjudicating authority is limited to taxability of receipts from Delhi Metro Rail Corporation (DMRC) on execution of contracts for laying of water pipelines and we restrict our exposition, as also the proceedings, to that aspect alone. 3. M/s LR Sharma Co was among the many of its ilk engaged for laying long-distance pipelines by Delhi Jal Board (DJB) and for shifting these to enable Delhi Metro Rail Corporation (DMRC) in execution of the metro rail network and who had been served with letters of inquiry in 2010 by jurisdictional tax authorities for submission of relevant tax returns and contracts. Their representational body took up the issue with Commissioner of Service Tax in communication of 29th October 2010 and the response of 24th November 2010 reiterated the legality of the contemplated proceedings arising from taxability under section 65(105)(zzd) of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... telephonically to the Chartered Accountant of the party. During this visit they were requested to furnish the copies of contract is executed by them as well as the balance sheet for the year 2009-10 (Trial balance if the audited is not available) which they promise to submit on 5.10.10, but the same have not been submitted till 7.10.10 in spite of telephonic reminder to the CA. Therefore, service tax liability for the Financial Year 2009-10 shall be taken into account on the basis of best judgment assessment as provided under Section 72 of the Act During the year 2008-09 the party had shown the following receipts under the following taxable services:- The details of Contract Receipts , Machine Hiring Charges Rental Income for the above. And the service tax liability thereon has per figures given in the relevant balance sheets 2005-06 to 2008-09 as well as calculated above for the year 2009-10 under Section 72 of the Act is as under:- Bi-furcation of the figures w.e.f. 16.6.05, 18.4.06, 11.5.07, 01.6.07, 16.5.08 24.2.09 for charging service tax at the relevant rate not available. Hence service tax charged on the above yearly figures/amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for condonation of delay. 7. On successful challenge by Revenue in the High Court of Delhi which, by order dated 20th March 2014, reversed the finding on maintainability and directed restoration of appeal before the Tribunal, application for such restoration was moved and the Tribunal, vide miscellaneous order no. 54030/2014 dated 25th November 2014, dismissed the same as misconceived in view of the specific order of the High Court. Two applications - by the respondent-assessee challenging the maintainability of an appeal naming a respondent other than the noticee and by the appellant-Commissioner seeking early hearing - were disposed of by miscellaneous order no. 50052-50053/2017 dated 8th February 2017 rejecting the former and allowing the latter. 8. On submission of the Learned Authorized Representative that relied upon documents and annexures were not part of the appeal records and, being required for supporting the contentions of appellant-Commissioner, seeking time to obtain them as well as directions to the respondent-assessee to provide these, interim order no. 3/2018 dated 11th January 2018 adjourned the proceedings to 28th February 2018. Thereafter, vide final or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions in this regard before the CESTAT. 5. Since the enquiry in the matter started in 2007, we request the CESTAT to dispose of the appeal at the earliest convenience, and preferably within six months from the date fixed by this Court for listing of the appeal before it for directions. 6. The appeal of the department will now be listed before the CESTAT for directions on 2ndDecember, 2019. 10. At the hearing before the Tribunal on 10th February 2020, the matter was adjourned to 25th February 2020 with the direction that Learned Departmental Representative .. prepare paper book of documents/agreements, as directed in the remand order of the High Court. Copy of such paper book should be given to the Counsel for the assessee/respondent at least three days before the next week of hearing. 11. It would appear from the above that the impugned order was found by the Committee of Chief Commissioners to be fit for appeal on the ground that the treatment accorded to Delhi Jal Board (DJB) and Delhi Metro Rail Corporation (DMRC) was erroneously equated in the adjudication order, that the activity of the respondent is in conformity with section 65 (105) (zzd) of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to lack of such. On the contrary, the recovery proposed in the show cause notice has not made any adverse inference from such lack but has taken recourse to best judgment assessment permissible under section 72 of Finance Act, 1994 thereby obliterating the presence, and necessity, of those contracts insofar as the impugned proceedings are concerned. We also find that the designated relied upon documents are nothing but correspondence with the assessee seeking documents that have not been specifically enumerated. We note that Learned Authorized Representative had been highlighting the handicap caused by the non-availability of the contracts in determining the classification of the service. Doubtlessly, the noticee had presented an alternative classification based on judicial decisions which the adjudicating authority did not consider necessary to delve into and, consequently, was not within the ken of the competent reviewing authority. Any submissions made for introduction of facts and material that is not referred to in the show cause notice would have the effect of a fresh investigation and expanding of the framework of the notice itself; that is clearly not permissible. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works contract service encompassing those very services and to be applied only to services simpliciter erases the allegation of taxability as the charge of value-added tax on the material supplied in accordance with the composite contract is not in dispute. Relying upon the decision of the Larger Bench of the Tribunal in Lanco Infratech Ltd. versus Commissioner of Central Excise Service Tax, Hyderabad [2015 (28) STR 709 (Tri-LB)] holding that 18 (q) We are thus left with the activity of construction of pipelines/conduits under the turnkey/EPC mode. When the construction is for Government/Government undertakings and for water supply or sewerage disposal purposes, prior to 1-6-2007 this activity is classifiable under CICS and is excluded from the purview of the definition. Under clause (b) under Explanation (ii) of WCS, construction of a pipeline or a conduit primarily for the purposes of commerce industry is an activity falling within the definition of WCS. This provision in the definition of WCS is extracted from the definition of CICS, in parimateria. Construction of pipelines or conduit (otherwise than under a turnkey/EPC mode), when executed for Government/Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently no tax shall be leviable under Section 66 of the Act on the value of such services. This Tribunal in M/s. IRCON International Ltd. versus C.S.T. Delhi [ 2017 (4) TMI 1086 (Tri-Del) ] [IRCON is one of the company constituting the joint-venture i.e. the appellant] has held a composite work contracts irrespective include the category of service of erection, commissioning and installation irrespective that the said service is taxable since 1-7-2003 but since the services rendered is classified as works contract and the work contract in respect of railways is excluded from the tax liability as per the statutory definition itself, no question of levy of any service tax on such contract arises. It was also clarified that it is a well settled legal position that metro work is nothing but railways work. also offers ground for discard of the appeal of Revenue which is, according to him, further stated in Afcons Infrastructure Ltd. versus Commissioner of Central Excise, Mumbai-II [2015 (38) STR 194 (Tri-Mumbai)] holding that 7. It is also a well-known fact that the Indian Railway itself as an organisation, which is meant to run on commercial basis. Recognising these facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no finding in the impugned order setting aside as erroneous a finding of the adjudicating authority, on the basis of materials that were there either before the adjudicating authority or before the Tribunal. he contended that the plea of the Learned Authorized Representative is tantamount to that disapproved by the Hon ble High Court of Calcutta. 18. He further contends that the facts relating to the dispute have been incorrectly adduced in the appeal in as much as the work undertaken is that of shifting of water pipelines to enable setting up of the rail network on the planned sites without impinging upon the access of Delhi Jal Board to infrastructure belonging to them; the pipelines are not intended for use of Delhi Metro Rail Corporation. He points out that the contracts had not been awarded directly to the respondent herein and that the respondent had, in turn, awarded the work to M/s Larsen Toubro Ltd. According to him, the exclusion of any proceedings against any of the others for rendering the same service to Delhi Metro Rail Corporation (DMRC) establishes the lack of propriety in the proceedings initiated against the respondent which had been correctly dropped ..... X X X X Extracts X X X X X X X X Extracts X X X X
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