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TMI Blog2024 (8) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... gross value of the works contract the value of properly in goods transferred in the execution of a works contract.' Thus, the taxable category Erection, Commissioning and Installation Services could only cover pure service contracts within its fold. In the present case, it is noted that the work order in respect of Chhatrasal Stadium involved supply of material and installation commissioning of the EPABX system. Consequently, with effect from 01.06.2007 only, such composite contracts would be eligible to tax under Works Contract Service. The demand will have to be calculated based on the actual turnover figures. In view of the above, it is held that it would be appropriate to remand the case for recalculation of the demand by giving the benefit of abatement to the appellant. Invocation of extended period alleging suppression and fraud along with interest and penalty under section 78 of the Finance Act, 1994 - HELD THAT:- There is evidence that the appellant had tampered with four of his VAT returns, in order to substantiate his claim that as VAT had been paid on the transactions, hence no service tax is leviable. This act of the appellant cannot be overlooked. This clearly ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said order, the appellant filed the present appeal. 3. Learned Chartered Accountant for the appellant submitted that in the present case, the appellant is carrying on the activity of supply, fixing, laying of telephone cables for connections, cables, pipes etc. for various Government departments like Central Public Works Department and Public Works Department. The other works include inter alia fixing of master console phone system with digital EPBAX, maintenance of telephone intercom networking system at Rashtrapati Bhawan etc. The Learned Counsel submitted that the department formed an opinion that the activity carried on by the Appellant would be covered under 'Erection, Commissioning or Installation Services. In this context, he submitted that as per the definition of Erection, Commissioning or Installation, it is evident that to attract the taxability under said category, there must be installation of electrical and electronic devices, including wiring or fitting. In other words, he stated it can be said that the service should be installation of an electrical or electronic device i.e., a machine or equipment that uses electricity to perform any other function) with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... digarh Besides, the service of works contract provided by the Appellant would not be taxable prior to 01.06.2007 i.e., 'Introduction of Works Contract Service', in view of judgment of Hon'ble Supreme Court in the case of Commissioner of C. Ex. Cus., Kerala Vs. Larsen Toubro Ltd. - 2015 (39) S.T.R. 913 (S.C.). 3.3 The Learned Chartered Accountant further submitted that as the appellant was providing the services of cable laying and pipelines along with material, therefore was eligible for abatement of 67% provided under Notification No. 1/2006 dated 01.03.2006. He further submitted that in the instant case, the appellant was eligible for benefit of exemption for small scale service provider on the ground that gross amount received is less than the threshold limit. He stated that demand had been wrongly calculated by the department, as even if it is assumed that the appellant is liable to pay service tax, the demand could only have been confirmed after giving the benefit of Notification No. 1/2006, which would be much lesser than the demand confirmed by the department. 3.4 Learned Chartered Accountant contended that the appellant was issued with subsequent show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue a show cause notice within the extended period of 5 years from the relevant date, if there is fraud suppression on the part of the Assessee. However, in the instant case there is no suppression or fraud on the part of the appellant, the show cause notice has been issued invoking the extended period of limitation. Further, even if it is assumed that the extended period has been rightly invoked, the demand for the period April 2006 to September 2006, would be beyond the period of 5 years and thus, liable to be set-aside. He prayed that the appeal be allowed. 4. Learned Authorized Representative for the Department reiterated the findings in the impugned order and submitted that it is not in dispute that the appellant during the relevant period had been providing services in relation to Erection, Commissioning and Installation Service'. In respect of services provided by them to CPWD and in connection with CWG-2010, the appellant had already deposited Service Tax for the period 2009-10 and 2010-11 treating the same as Works Contract. However, on scrutiny of VAT returns submitted by the appellant for the entire period of demand i.e. 2006-07 to 2010-11, it was found that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation against the appellant regarding discharge of their Service Tax liability against the payments received on account of providing taxable services in or in relation to CWG-2010 through CPWD. He further contended that the department would not have come to know about these irregularities and would have been deprived of its legitimate revenue. Further, Ld. AR stated that the appellant had neither registered himself with the department nor had he discharged their Service Tax liability with respect to CWG-2010 work also and against the payments received for providing taxable services prior to or after the CWG work. The appellant had also not filed Service Tax-3 return prior to initiation of said investigation nor observed other statutory obligations. It was obligatory on the part of the appellant to be fully aware about their statutory liabilities when they were rendering taxable service and receiving payments there against, wherein they failed and even on persuasions they discharged Service Tax liability only for a limited period including payments received from CPWD for providing taxable services in or in relation to CWG-2010 related work and had shown their inclination in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial facts that may affect the decision. In the case of Harbans Lal Vs Mohinder Lal Others, the Hon ble High Court of Jammu Kashmir, on 14.01.2020, held as follows:- 15. That apart, the petitioner/plaintiff as rightly observed by the appellate Court is, prima facie, guilty of suppression of material fact about the filing of earlier suit and its fate, in the present suit. A party seeking discretionary relief has to approach the Court with clean hands and it is required to disclose all material facts which may one way or the other affect the decision. The suppression of material facts itself is a sufficient ground to decline the discretionary relief of injunction. Suppression of material facts from the Court itself is a ground for declining to exercise discretion and grant equitable relief of injunction. 6.1 The appellant has not submitted any evidence to the contrary before this Tribunal, and has not taken cognisance of this vital aspect of investigations. It is settled law that fraud vitiates everything. If a petitioner/appellant/applicant is found guilty of concealment of material facts or making an attempt to pollute the pure stream of justice, the court not only has the right b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of properly in goods transferred in the execution of a works contract. 7.2 Therefore, the taxable category Erection, Commissioning and Installation Services could only cover pure service co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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