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TMI Blog2008 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... al) Amit Jain, DR for the appellant. Sanjay Grover, Advocate for the respondent. [Order per S.N. Jha, President] - This appeal by the Revenue is directed against the order-in-appeal of Commissioner (Appeals) dated 28.04.2005 setting aside the order-in-original of the Assistant Commissioner, Central Excise, Bhilai, and allowing the appeal of the assessee-respondent. 2. The respondent, M/s BSBK Pvt. Ltd., are engaged in the business of execution of turnkey contracts for engineering works like drawing, designing, engineering, fabrication, testing, erection and commissioning of plants equipments at the site of their clients. On scrutiny of the records, the officials of the Central Excise found that during the period from 07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is that in a case of turn-key works contract, service tax is not payable as the contract can not be vivisected and the services relating to 'design and engineering' forms a minor portion of the total work. The case of the Revenue on the other hand is that works contract in respect of turnkey projects can be dissected on the basis of supply of goods, materials the property in which passes on in some form or the other on the one hand and the services rendered on the other hand. In other words, the contract can be divided into sale contract and service contract in accord with the 46th amendment in the Constitution of India. In the grounds of appeal, reference is made to the CBEC's Circular No. 49/11/2002-ST dated 18.12.2002 holding that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relating to 'consulting engineer' or 'design engineer', should be dissected from rest of the contract and on value thereof, service tax levied. The respondent relies on the 'dominant nature' test for determining the type of the contract. 6. The respondent relies on the decisions of the Tribunal in Daelim Industrial Co. Ltd. vs CCE, Vadodara, 2003 (155) ELT 457 (T); Ircon International Ltd. vs CCE, Mumbai-IV, 2006 (1) STR 46 (T); CCE, Bhopal vs Shapoorji Pollanji Co. Ltd., 2006 (1) STR 164 (T); CCE, Raipur vs Beekay Engg. Corporation , 2006 (3) STR 168 (T); Schenk Jenson Nicholson Ltd. vs CCE, Ranchi, 2006 (1) STR 183 (T); Emerson Process Management Power Water Solution Inc. vs CCE, Kanpur, 2006 (3) STR 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the Court had held was not a sale. The effect in law of a transfer of property in goods involved in the execution of the works contract was by this amendment deemed to be a sale. To that extent the decision in Gannon Dunkerley was directly overcome. Sub-clause (c) deals with hire purchase where the title to the goods is not transferred. Yet by fiction of law, it is treated as a sale. Similarly the title to the goods under sub-clause (d) remains with the transferor who only transfers the right to use the goods to the purchaser. In other words, contrary to A.V. Meiyappan's decision a lease of a negative print of a picture would be a sale. Sub-clause (e) covers cases which in law may not have amounted to sale because the member of an incorp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29A) of Art. 366, there is no other service which has been permitted to be so split. For example, the sub-clauses of Art. 366(29A) do not cover hospital services. Therefore, if during the treatment of a patient in a hospital, he or she is given a pill, can the sales tax authorities tax the transaction as a sale? Doctors, lawyers and other professionals render service in the course of which can it be said that there is a sale of goods when a doctor writes out and hands over a prescription or a lawyer drafts a document and delivers it to his/her client? Strictly speaking with the payment of fees, consideration does pass from the patient or client to the doctor or lawyer for the documents in both cases. 45. The reason why these services do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be pressed into service for treating turn-key works contract on different footing. If 'works contract' can be split into sale contract and service contract, a different treatment may not be given to the so-called turnkey contract simply because the contract is on a turnkey basis although basically a works contract. We are prima facie of the view that Daelim was not correctly decided and the finding that the turnkey works contract cannot be vivisected requires reconsideration. We are conscious of the fact that the decision in Daelim was challenged by the Revenue in the Supreme Court, but the appeal was dismissed vide order dated 02.08.2004 reported in 2004 (165) ELT A181. It is well settled that summary rejection of the SLP or a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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