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TMI Blog2025 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the Constitution and the respective statutes. These are not commercial ventures of the local authority and, consequently, should be covered in the exemptions or exclusions that are available to such authorities under law. As pointed out by the Learned Counsel for the appellant, the decisions of the Hon'ble Supreme Court, in COLLECTOR OF C. EX., VADODARA VERSUS DHIREN CHEMICAL INDUSTRIES [2001 (12) TMI 3 - SUPREME COURT] and in COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS M/S RATAN MELTING & WIRE INDUSTRIES [2008 (10) TMI 5 - SUPREME COURT], bind subordinate officers to the confines of circulars of Central Board of Excise & Customs (CBEC) and the contextual reference to these in the submissions of the appellant-assessee have not been considered by the adjudicating authority. The appellant-Commissioner, while not touching upon the exclusion of 'multi-functional belts', has assailed inclusion of consideration received from the principal contractor by reference to entries in the books of accounts. Conclusion - The tax liability would have to be adjudged strictly in conformity with the proposal for taxing the consideration as 'management, maintenance or repair service' f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same - for classification of activities into separate services where feasible - with the consequence, as in the present instance, of taxing the entirety of the consideration otherwise. Thus, the notice proposed levy of tax on the entirety of income as consideration for having rendered 'management, maintenance or repair service' under the authority of section 65(105)(zzg) of Finance Act, 1994 and as consideration for 'service' as defined in section 65B(64) of Finance Act, 1994 for the respective periods. 3. The adjudicating authority acknowledged the explanation of the noticee that the inclusion of receipt of ₹ 5,19,75,000, for having provided 'multi-function belts', and of ₹ 3,16,43,582, as 'sub-contractor' of M/s Technotrade Impex Pvt Ltd and M/s Middle Earth Enterprises, was, owing to be from 'trading' and not attributable to contract with Municipal Corporation of Greater Mumbai (MCGM) respectively, not includible in the value of taxable service. Furthermore, it was held that ₹ 20,53,49,654 included in proposal for recovery of tax, comprising ₹9,10,02,726 for establishing new gardens, of ₹ 208,07,499 being for 'traffic islands' which were pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon by Learned Authorized Representative. 5. Appeal of M/s Varad Vinayak Gardens contests confirmation of demand on the ground that the service connected with fabrication and civil/electrical works were exempted by notification [circular no. 25/2012-ST dated 20th June 2012] after 1st July 2012, that, even before 1st July 2012, horticulture and allied activities were not liable to be charged to tax, that demand of tax for rendering of 'security services' traversed beyond the scope of 'taxable service' proposed in the show cause notice for the 'pre-negative list era' and that the value of goods supplied in the course of rendering service was not liable to be included in taxable value. 6. Learned Counsel contended that the thrust of the show cause notice was to fasten liability on them as provider of 'management, maintenance or repair service' and recourse to other services by the adjudicating authority was in excess of the proposal in the show cause notice. It is also contended that the activities rendered for government/local authority was to be excluded for the period after 1st July 2012 in terms of mega exemption issued on 20th June 2012. Furthermore, it was submitted that horti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbai (MCGM), and concluded that consensus ad idem of the two parties could be best described as 'maintenance and repair' of gardens at several locations with attendant activities being subsidiary thereon for liability to arise on the whole of consideration as 'composite service' in section 65A of Finance Act, 1994 and 'bundled service' in section 66F of Finance Act, 1994 irrespective of other activities being otherwise classifiable elsewhere or not all. The grievance of the appellant-Commissioner is, principally, about discard of the principle of activities subsuming in the 'essential character' of identified 'service' by applying the definition of the identified 'service' to each activity in the contract. 8. It appears to us that a special mechanism incorporated in Finance Act, 1994 for being invoked in specific circumstances enumerated therein has been relied upon without precursor exercise of eliminating the preceding circumstances renders the finding to be lacking in legal rigour. Prior to July 2012, taxable services were enumerated in section 65(105) of Finance Act, 1994 and subject to tax under section 66 of Finance Act, 1994 while, thereafter, all activities, other than tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture for residents of designated areas devolves statutorily upon 'local authorities' as defined in the Constitution and the respective statutes. These are not commercial ventures of the local authority and, consequently, should be covered in the exemptions or exclusions that are available to such authorities under law. As pointed out by the Learned Counsel for the appellant, the decisions of the Hon'ble Supreme Court, in re Dhiren Chemical Industries and in re Ratan Melting & Wire Industries, bind subordinate officers to the confines of circulars of Central Board of Excise & Customs (CBEC) and the contextual reference to these in the submissions of the appellant-assessee have not been considered by the adjudicating authority. 10. The appellant-Commissioner, while not touching upon the exclusion of 'multi-functional belts', has assailed inclusion of consideration received from the principal contractor by reference to entries in the books of accounts. We are not aware of the circumstances in which the books of the principal contractor were made available to the reviewing authority; the show cause notice, and the impugned order, are silent on the inference to be drawn but we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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