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TMI Blog2024 (12) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tissue paper plant which is manufactured by TOSCOTEC, Italy and is supplied by TOSCOTEC itself to the appellant along with all such services of getting the same properly erected and installed and commissioned. In light of this observation, the mere fact that the erection, installation, commission and construction of civil structure for the purpose has got done from other Indian companies is irrelevant for the purpose. The act of supervising the erection, commissioning and installation is held to be an act for the purposes of carrying out erection, commissioning and installation. It is observed that the contract is a composite contract of supply and services as the price of goods has not been separately mentioned than the price of services. The contract price is the CISF price of goods at the rate of 69,50,000 Euros (Rs.44,79,27,500). This price is mentioned to have included the price of services, freight price, price of insurance from Italian port to mill site Amlai. Hence, it is clear that the contract in question is a composite contract for supply of goods and for rendering services. The services which are meant for the purpose of carrying out erection, commissioning and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 of the order under challenge has recorded that the liability of service tax came to the notice when they first made the payment to M/s. TOSCOTEC on 30.06.2008. For this, the ST-Return was required to be filed on 25.10.2008 but the appellant failed to discharge their liability during the appropriate period. The said act is rightly held to be a deliberate attempt for non-payment of service tax in contravention of provisions of Section 68 of Finance Act, 1994. Hence, it is held that proviso to Section 73 of Finance Act has rightly been invoked. Show cause notice cannot be held to be barred by time. The order under challenge is accordingly upheld - However, with the modification that the amount of service tax already paid be set off against the demand confirmed - the appeal is hereby order to be dismissed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MRS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri Ayush A. Mehrotra and Shri Upkar Agarwal, Advocates for the Appellant Shri Harshvardhan, Authorized Representative for the Respondent ORDER Present is an appeal against the Order-in-Original No. 12/2017 dated 02.02.2017. The facts in brief which have culminated into the said order are as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The TOSCOTEC was merely supervising the erection and commissioning and they were not themselves performing erection and commissioning. Hence, the allegations of the department for considering their activity as Works Contract Service are blatantly wrong. 3.1 It is further submitted that Rule 2A of the Service Tax (Determination of Value), Rules 2006 (hereinafter called as Valuation Rules) for including the value of services provided by independent contractors in the value of contract executed with TOSCOTEC was erroneously invoked in the present case. Such inclusion is alleged as double taxation. The confirmation of demand is prayed to set aside. Learned counsel has relied upon the decision of this Tribunal in the case of DNS Contractor Vs. Commissioner of Central Excise, Delhi reported as 2015 (37) S.T.R. 848 (Tribunal Del.) and Viral Builders Vs. Commissioner of Central Excise, Surat reported as 2011 (21) STR 457 (Tribunal-Ahmedabad). 3.2 Finally, it is submitted that the show cause notice issued in the present case is barred by time. In the present case, it is an admitted fact that the department despite investigating in December 2008 and getting immediate response and documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract Service. The value of the work done for erection and commissioning is not includable as the same has got done from the contractors in India after executing separate work orders. Rule 2A is alleged to have been wrongly invoked due to these facts. On the contrary, the department has alleged the activity of the appellant to be called as Works Contract Service. Various clauses of agreement dated 30.07.2007 have been relied upon to hold that the appellant was not merely rendering consultancy and supervision services along with the supply of goods, they were actually rendering the Works Contract Services by getting erected and commissioned the goods supplied. Rule 2A is impressed upon to have been rightly invoked. In the light of this controversy, following issues need adjudication: (i) Whether the activity rendered by the appellant can be called as Works Contract Service? (ii) Whether the appellant is liable to pay service tax on the expenditure incurred for erection and commissioning of the plant by engaging various sub-contractors in terms of Rule 2A of Service Tax Valuation Rules? 6 . Issue No.1 6.1 To adjudicate this issue, foremost we look into the definition of Works Contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. As per clause 5.12, the contractor/TOSCOTEC only had to provide the proper training for the operation and maintenance of the plant with the written approval of the employer/the appellant under contractors scope of supply and services. Training was also be provided by the contractor at the site during the later stages of erection, commissioning and initial operations according to appendix 1. 6.4 Perusal of these clauses makes it abundantly clear that the contract with TOSCOTEC was the contract of supply and services. Though the appellant has taken the plea that vis- -vis erection, start up and commissioning, TOSCOTEC/contractor only had to supervise i.e. they only had to provide the technical knowhow services, hence the contract cannot be called as Works Contract. But from the definition as reproduced above, sub-clause (ii) thereof, it is clear that whenever the goods are supplied for the purposes of carrying out works in clause (a) to (e), it shall be Works Contract Services. The phrase use in sub-cause (ii) is for the purposes of carrying out instead of being for carrying out . The use of word purposes in this sub-clause, to our opinion, means to include all activities which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a works contract shall be equivalent to the gross amount charged for the works contract less that value of property in goods transferred in the execution of the said works contract. Explanation. - For the purposes of this clause,- (a) gross amount charged for the works contract shall not include value added tax or sales tax, as the case may be, paid or payable, if any, on transfer of property in goods involved in the execution of the said works contract; (b) value of works contract service shall include, - (i) labour charges for execution of the works; (ii) amount paid to a sub-contractor for labour and services; (iii) charges for planning, designing and architect's fees; (iv) charges for obtaining on hire or otherwise, machinery and tools used for the execution of the work contract; (v) cost of consumables such as water, electricity, fuel used in the execution of the work contract; (vi) cost of establishment of the contractor relatable to supply of labour and services; (vii) other similar expenses relatable to supply of labour and services; and (viii) profit eamed by the service provider relatable to supply of labour and services. 7.2 The definition makes it clear that tho ..... 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