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TMI Blog2024 (4) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... ner. 2. The appellant is an electrical contractor and erects, commissions and installs electrical poles for the State Government Electricity distribution company and local authorities. He has a service tax registration from the department under the category of erection, commissioning or installation service and works contract service. The services rendered by the appellant were exempted from service tax under Notification NO. 25/2012 (S.No. 12), dated 20.6.2012 but these services were chargeable to service tax if they were provided to State Government undertaking companies and corporations. 3. The preventive wing of the Commissionerate gathered intelligence that the appellant was neither paying service tax nor has been filing ST 3 returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s received as seen from Form 26AS of the appellant. The contracts clearly indicate that they required the appellant to use materials to execute them. Hence, they were works contracts. Consequently, the demands cannot sustain nor can the interest and penalties. Submissions on behalf of Revenue 7. Ms. Jaya Kumari, learned authorised representative for the Revenue also supports the contention that the issue to be decided is ‗whether the contracts were Works contracts or contracts for purely service'. She strongly supports the impugned order that they were purely contracts for service and therefore, the demands must sustain along with the interest and penalties. Findings 8. We have considered the submissions on both sides and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to provide the materials towards construction of the base. It also required the appellant to ensure that the quality of the materials used were as specified. Thus, there was use of materials in these contracts though not supply of poles themselves. 12. Clause (29A) was inserted in article 366 of the Constitution of India and it reads as follows: (29A)"tax on the sale or purchase of goods" includes- (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter if sales tax is actually paid or not paid in any case- it depends on various other factors such as the legal provisions, exemptions, etc. under the State sales tax laws. 14. In this case, since the appellant was required to use cement and concrete as per the contracts, they squarely fall under the definition of works contracts under section 65B (54) of the Finance Act. Therefore, the SCN, the OIO and the impugned order were incorrect in assuming that they were not works contracts. The demand, interest and penalties in the impugned order therefore, cannot be sustained. 15. The appeal is allowed and the impugned order dated 28.07.2017 is set aside with consequential relief to the appellant. (Order pronounced in open court on 12/04/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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