Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise And ... vs Larsen And Toubro Ltd. And Petrofac ... on 21 March, 2006
Equivalent citations: 2006(107)ECC603, 2006ECR603(TRI.-MUMBAI), 2006[4]S.T.R.63
ORDER K.K. Agarwal, Member (T)
1. These are two appeals filed by the department against the order of the Commissioner (Appeals) dropping the proceedings against the respondents M/s Larsen & Toubro Ltd. in the first case and M/s Fetrofac International Ltd. in the second case. Since the issue involved in both the appeals is common, they are being decided through a common order.
2. In the first case, the respondent M/s Larsen & Toubro Ltd. were awarded a contract for setting up of (1) Solvent - Dewaxing/De-Oiling Uni 9SDU) and (2) Hydrotreater, Amine Treating Unit, Control Room pad Sub-station at Digboi Refinery vide contract No. (1) PROJ/SDU/DR/53 of 1999-2000 and (2) PROJ/HDT/DR/54 of 1999-2000 which includes the work of "Residual Process Design, Detailed Engineering, Procurement, Supply, Construction, Erection, Installation. Testing Commissioning and Mechanical Guarantee of the said Units. The Lump sum Price offered by the said assessee against the work of Turn Key Project for the said units of Digboi Refinery are as follows:
Sr. Description Price Contract No.
No. PROJ/SDU/DR/53 PROJ/HDT/DR/54
of of
1. Lump sum price for Rs. 9,00,90,000/- Rs. 8,31,60.000/-
Residual
Process Design and
detailed Engineering
2. Lump sum price for Rs. 51,54,16,100/- Rs. 54,64,00,000/-
Supply portion
3. Lump sum price for Rs. 38,36,24,000/- Rs. 35,21,04,000/-
Construction
installation portion
The above lump sum prices offered by the said appellant have been accepted by M/s. Indian Oil Corporation Ltd. (Assam Oil Division), Digboi vide their letter Ref. No. SDU/CON/02 and HDT/CON/03 respectively dated 24-2-2000.
3. In the second case, the respondent M/s Petrofac International Ltd., New Delhi was awarded the contract for Residual Process Design, Detailed Engineering, Procurement, Supply, Construction, Fabrication, Erection, Installation, Testing Commissioning and Mechanical Guarantee of sulphur block at Gujrat Refinery of M/s Indian Oil Corporation Ltd., Vadodara by accepting bid document 3841/3851/T-48/97-98/SKD/02.
4. They were awarded the said contract for US $ 1,39,13,650/- + Indian Rs. 46,95,59,746/- in lump sum as para 2.1 of the above acceptance letter out of which US $ 26,99,778/- was earmarked for Residual Process Design and Detailed Engineering.
5. It was alleged that in both the case the respondents have deliberately and intentionally not disclosed the material fact of their providing taxable service as consultant engineer to the department. Therefore, show cause notices were issued to them demanding service tax amounting to Rs. 9,68,58,668/- in the first case and Rs. 62,59,435/-in the second case besides proposing penalties under Section 76, 77, 78, 79 ana 81 of Chapter V of Finance Act, 1994. In both the cases the show cause notices were confirmed in which service tax amounting to Rs. 9,68,57,665/- in the first case and Rs. 62,59,435/- in the second case were confirmed and penalties of equivalent amount were imposed on the respondents M/s Larsen & Toubro Ltd. and M/s Petrofac International Ltd. besides imposing personal penalties on the officers of the respondents.
6. Both the above orders were challenged by the respondents before Commissioner (Appeals) who allowed the appeal in both the cases mainly relying on the Tribunal's decision in the case of M/s Daelim Industrial Co. Ltd. v. C.C.E., Vadodara . It is against these two decisions of the Commissioner (Appeals) that the department has come up in appeal.
7. Heard both parties.
8. The learned S.D.R. Shri Ajay Saxena, submitted that the Commissioner (Appeals) has set aside the orders in both the cases relying upon the Tribunal's decision in the case of Daelim Industrial Co. Ltd. cited supra. In this case the Tribunal has held that a work contract cannot be vivisected to tax the service portion. It was submitted that the ratio of this decision is not applicable in the instant case, since the value of service is separately mentioned in the contract/agreement. In fact the agreement itself is an agreement for simply and services. There is no need to vivisect the contract to ascertain the value of service. In the billing also the supply portion is separately billed and service portion is separately billed. The agreement very specifically mentions the scope of service as well as the supply. It was accordingly submitted that when in a work contract the charges for the service have been separately and clearly mentioned it would cease to be an individual work contract and there shall be absolutely no dispute about the liability to service tax of the taxable services provided in course of execution of the work contract. In view of this the order of Commissioner (Appeals) was contrary to the facts of the case.
9. The learned S.D.R. invited attention to the details of the contract wherein the break up, the lump sum price for residual process design and detailed engineering was given separately as compared to lump sum price for supply portion and lump sum price for construction/installation portion. It was submitted that it was only in respect of the lump sum price for residual process design and detailed engineering that contract itself indicates that the service tax is included in the lump sum price as distinct from the Daelim Industrial Co. Ltd. case where the service tax was indicated as per the prevailing rate and the amount was quantified and therefore there was an element of uncertainty in respect of service tax and it is not known whether the service tax was actually paid or not. This was not the case in the contracts relating to M/s Larsen & Toubro where service tax was included in the lump sum relating to residual process design and detailed engineering. The very fact that residual process design and detailed engineering has separately indicated inclusion of service tax meant that the contract was already vivisected and subject amounts were clearly earmarked and there was no need of further vivisecting the contract in order to find out the lump sum payable relating to residual process design and detailed engineering.
10. It was further submitted that the Tribunal's judgment in the case of M/s Daelim Industrial Co. Ltd. is based on the Supreme Court judgment in the case of State of Punjab and Ors. v. Associated Hotels India Ltd. . The issue involved in the case of Associated Hotel of India Ltd. was when a hotel charges consolidated rate from its visitors for lodging and boarding and the bill prepared by the hotelier is one and indivisible not capable of being split into one for residence and the other for meals, whether the supply of meals by the hotelier to the resident visitors would amount to sale of food liable to sales tax. Attention was drawn to para 8 of the decision which in turn refers to the Andhra Pradesh High Court decision in the case of Krishna & Co. Ltd. v. Andhra Pradesh (1956) 7 STC 26 where raw tobacco was given for the purpose of drying and was returned in packing material alongwith the dried tobacco. The question was whether there was a contract for sale of the packing material besides the job charges for drying of tobacco and it was held where the price charged for drying specially indicates the cost of packing charged, a contract for sale of packing material can be inferred. It was submitted that in the present case, when the lump sum for residual process design and detailed engineering were separately indicated the contract for service can be separately implied in the works contract and will be chargeable to service tax.
11. Besides above it was submitted that the dispute in the Associated Hotel's case pertained to the period prior to 46th amendment of the constitution and the Supreme Court on the basis of constitutional provision during that period held that the revenue was not entitled to split the transaction into two portions, one of service and the other of sale of food stuff with a view to subject the latter to the sales tax. This judgment has become irrelevant after 46th amendment of the constitution by which Article 336 (29A) of the constitution of India was amended so as to enlarge the scope of entry 54 of List II of 7th Schedule of the Constitution - "tax on sale or purchase of goods, to include tax on transfer of property in goods (whether as goods or in some other form) involved in execution of a work contract". Therefore, the argument that the work contract cannot be vivisected and a part of it subject to tax is no longer valid. Moreover, Supreme Court in its judgment in the case of M/s Associated Hotels relied upon by the Tribunal in its judgment in case of M/s Daelim Industrial Co. Ltd. has upheld that an implied contract for supply of goods while executing a service contract can be inferred if there is evidence in this regard.
12. Reference was also invited to the decision of the Kerala High Court in the case of Kerala Colourlabs Association v. Union of India 2003 (TIOL) 19 H.C. Kerala, wherein it was held that for levy of service tax, the taxing event is rendering of service. It was pleaded before the court that in photography more than 50% of the cost is the cost of photo paper and other materials, which is passed on to the customer and on this basis applying the predominant intention test upheld in the Supreme Court's decision in the case of Rainbow Colour Labs and Ors. v. State of Madhya Pradesh 2001 (134) E.L.T. 322 (S.C.), this would be a contract for sale of goods and not a service contract. The Kerala High Court in Para 11 of the judgment held that the discussion about application of pre-dominant intention which is for determining whether the contract is a work contract or a contract for sale of goods is not relevant to the issue involved in the case that once it is accepted that the taxing event is rendering of service and not the sale of goods, irrespective of whether it is the work contract or a contract for a sale of goods taxing event would occur because of service rendered, and that it is the taxing event which determines the true event of the tax. Thus in this case the High Court has clearly held that when the taxing event is rendering of services, the services rendered would be taxable even if rendered in course of execution of a contract. The SLP filed against the judgment of the Kerala High Court was dismissed by the Supreme Court. Besides this the Supreme Court in its judgment dated 27.05.2005 (2005 TIOL/135/SC) has once again upheld the Kerala High Court judgment in the case of Kerala Colour Lab Association and in para 5 of the judgment has observed that the Kerala High Court judgment considered all the aspects and there is no infirmity in it.
13. It was further submitted that in the case of Builders' Association of India v. Union of India 1989 (073) STC 0370 (SC), it was pleaded by the Government that the preposition that a work contract cannot be divided would not be valid in view of 46th amendments to the constitution enlarging definition of sales to include deemed transfer of property in goods in course of execution of a work contract and this view has been upheld by the Supreme Court. However, since service tax is levied by Central Government under the residual entry where it has powers to tax service, whether it has been rendered in course of execution of work contract or otherwise for this purpose a deemed definition like the one incase of sales tax is not necessary.
14. Reference was also invited to Board's Circular vide F. No. 49/11/2002-ST dated 18.12.2002 wherein it has been clarified that a turnkey project for construction of flats, administrative building etc. involve a lot of preparatory work is required e.g. soil testing, survey, planning design, drawing etc. and once the design and drawing are completed by the construction company it always seeks the approval of the client before proceeding with the construction. If the client suggests some changes they are incorporated in the design. This portion of the work is provided to its client and the service is definitely of a 'consultancy engineer' and hence taxable. It was accordingly submitted that the instant case is fully covered by the Board's circular and therefore the drawing and detailed engineering charges will be subject to service tax.
M/s Petrofac International Ltd.
15. In respect of above case, the learned S.D.R. submitted that the issue involved is the same and the facts are also similar and the arguments in the above case will fully apply to the instant case also.
16. In view of above, it was submitted that once the work contract relates to supply of services as well as to execution of work i.e. construction, service tax shall be payable on the lump sum paid for the services rendered and is liable to service tax.
17. The learned advocate for the respondents submitted that the department has challenged the Commissioner (Appeals)'s order mainly on the ground that the Commissioner (Appeals) had not appreciated the decision in Builders' Association of India v. Union of India and Gannon Dunkerley & Co. v. State of Rajasthan wherein it was held that after 46th Constitution amendments of 1984, Works contract can be divisible and that the High Court decision in the case of Associated Hotels of India case was distinguishable and further the same pertains to the period prior to 46th amendments of the constitution and Supreme Court on the basis of constitution provision during that period held that the Revenue was not entitled to split up the transaction in two portions i.e. one of service and the other for sale of food stuff. The other arguments of the Revenue is that the issue involved in the present case is squarely covered by the decision of the Kerala High Court in Kerala Colour Lab Association v. U.O.I. and C.B.E.C. Circular No. 49/11/2002-ST dated 18.12.2002. It has also been argued by the department that the fact of the present case are different from that the Dealim case cited supra and that even the decision in the Associated Hotel case referred to a situation where a contract is implied for sale of packing material apart from the service depending upon nature of the contract.
18. As regards the C.B.E.C. circular, it was submitted that the same is not binding on Commissioner (Appeals) and in fact the circular was cited by the department before Hon'ble Tribunal in the case of Larsen & Toubro Ltd. v. C.C.E., Cochin and yet the Hon'ble Tribunal did not agree with the circular and followed its earlier decision in Daelim Industrial Co. Ltd. case cited supra.
19. It was submitted that their case is squarely covered by the Tribunal's decision in the case of Daelim Industrial Co. as the facts are identical. He contested the learned S.D.R.'s claim that the service tax has been demanded only on process design and detailed engineering price and submitted that in the assessment order the tax has been demanded for the whole of the contract price which besides residual process design and detailed engineering also include the lump sum price for supply portion and for construction and installation portion. A great emphasis has been laid on the fact that there was a seperate demarcation of price for residual process design and detailed engineering including the fact that the price included the service tax payable. It was submitted that the price break up was only for the purpose of billing schedule or control of cash flow. There was no agreement between the parties for rendering the service of design and engineering for specific price as a stand alone activity. In case of respondent, there was no understanding for a separate services for design and engineering divorced from the main contract. Therefore, no amount of total lump sum price can be attributable as taxable service of a consulting engineer. The detailed engineering was carried out by Engineers India Ltd. as consulting engineer for I.O.C.L. and to a limited intent by another company by the respondents group of companies viz. L & T Chiyoda Ltd., Baroda and they had shown the services as consulting engineer in the service tax return filed by them and the service tax as applicable paid accordingly. The amount of service tax indicated in the contract was not the actual service tax but other taxes also. The facts are identical with that by M/s Daelim Industrial where also service tax payable was mentioned in the contract itself.
20. It was submitted that main job of the respondent is to construct the plant. Since the customer is giving the basic technology for the construction of plant, it has a right to suggest the changes/modifications in the plant/drawing or specification. The job involved in preparing the plant, drawings and design is not something that can be considered on independent footing. This is not a segment, which can be treated separate from the actual construction work. The customers while granting approval to the drawings of the designs etc. is satisfying himself that the implementation of the project is according to the technology supplied by it. I.O.C.L. was not using the respondents as a consulting engineer. The appropriate description of the appellants is "contractor by which name the bid documents described the respondents."
21. Reference was invited to Supreme Court decision in the case of Sentinel Rolling Shutters and Engineering Company Pvt. Ltd. v. Commissioner of Sales Tax (1978) 4 SCC 2609 where the Supreme Court was considering whether it was possible to break up one contract into two segments - one for sale of goods and the other for providing services. The court observed that in a individual composite contract, this is not possible to do so. The court accepted the commercial practice in spreading the contractual payment over the entire period of the execution of the contract and held that the progressive release of payment would not have any bearing of the nature of the contract.
22. Following cases were cited, where the courts have laid down that composite contract is one transaction and it is not permissible to dissociate one segment for separate fiscal treatment:
(i) British Railways Board v. Customs and Excise Commissioners [1977] STC 221 [sale of identity card for an amount to a student which entitles him to purchase rail ticket at concessional rate subsequently is advance payment for rail transport and nor for sale of goods. The essence of transaction has to be seen.]
(ii) British Airways plc v. Customs and Excise Commissioners [1990] STC 643 [There is no two supplies of services one of in - flight catering and other of air transport. It is a single supply of air transport serving Service of food is not an aim for the passenger in itself but for better enjoyment of the main service of air transport. Whether it is necessary for the main supply is not a relevant question]
(iii) Card Protection Plan Ltd v. Customs and Excise Commissioners [1999] STC 270 ECJ and Card protection Plan Ltd. v. Customs and Excise Commissioners [2001] STC 174 HL [There was a single supply where one or more elements constituted the principal service and others were merely ancillary, in that they did not constitute for customers aims in themselves, but simply a means of better enjoying the principal service. What constitutes a single supply in economic sense should not be artificially split.]
(iv) Customs and Excise Commissioners v. British Telecommunications plc [1999] STC 758 [Delivery charges shown separately in the invoice does not imply that BY was getting a supply of service of delivery apart from supply (sale) of cars. There was a single supply of purchase of a delivered car. Delivery was incidental to supply of the car. The fact that delivery could have been separately arranged from difference party is not material. The court has to see what the arrangement was in the instant case.]
(v) Pilgrims Language Courses Ltd v. Customs and Excise Commissioners [1999] STC 874 [ Provision of transport from airport, accommodation, catering, recreation, etc. are incidental to language teaching course. These do not constitute the main am of the student. There is a single supply of providing education.]
(vi) State of Madras v Gannon Dunkerley & Co. (Madras) Ltd. [ The primary objective of the contract is to be kept in view. There is one composite service for a visitor in the hotel. The revenue authorities, attempt to split up the transaction so as to be able to tax 'sale of food' is not warranted.]
(vii) CIT v. Smt. P. Andal Ammal (2002) 243 ITR 715 (Mad) [In spite of two leases, one for building and another for furniture and fittings, it was a single indivisible transaction, Both facilities are intended to be enjoyed together. Letting of building part cannot be treated separately from the other.]
(viii) CTS v. Steel Plant Pvt. Ltd. (1995) 99 STC 532 (Bom) [ A contract for installation and erection of a plant is an indivisible works contract. The nature of contract does not depend on the mode of payment. The fact that the value of machinery and the sale tax payable on that has been shown in the contract would not mean that sales tax can be levied on sale of machinery as it is otherwise a composite works contract.] It was forcefully submitted that the Tribunal has already decided in the case of Daelim Industrial Co. Ltd. v. CCE, Vadodara that there is no element of engineering consultancy in turnkey contract and no service tax is payable under the category of consulting engineer. The ratio of this decision has been followed by the Hon'ble CESTAT in L&T Ltd. v. CCE, Cochin . The Hon'ble Supreme Court has dismissed the Department's SLP in Commissioner v. Daelim Industrial Co. Ltd. . In Elecon Engineering Company Ltd. v. Union of India , the Hon'ble Gujarat High Court followed the ratio of the decision given in Daelim Case (supra) and Larsen & Toubro (Supra) cases. In Ircon International Ltd. v. CCE, Mumbai 2005 2 STT 264 (New Delhi - CESTAT), the Hon'ble CESTAT has held that construction contracts cannot be subjected to service tax as consulting engineer service, either as a whole or in part, and further observed that this position remains covered by the decision in the case of Daelim Case (supra)
23. As regards 46th constitution amendments it was submitted that it defines "tax on sale or purchase of goods" an expression appearing in the constitution in the context of" levy of" sales tax. This has no impact on laws other than laws on tax on sale or purchase of goods. The amendment has introduced the context of "deemed sales". It does not alter the meaning of sale in the Sale of Goods Act or other enactment, including the law on service tax. The Supreme Court has in the case of State of Maharashtra v. Laljit Rajshi Shah hold that legal fiction are created for some difinite purpose and the fiction is to be limited to the purpose for which it was created and should not be extended beyond that legitimate field. Accordingly, it was submitted that legal fiction of deemed sale was introduced by the 46th constitution amendment for levy of sales tax and it has no application as regards interpretation of service tax provision. Further in any case the 46th constitution amendment has the result of dividing whole contract into sale of goods and supply of services as a whole. There is no method of further dissecting the service part. In the case of the respondent, the main service is construction and commissioning of the plant. It is one integrated activity. The 46th constitution amendment does not enable to segregate residual process design and detailed engineering from the main service contract.
24. In recently delivered judgment in Bharat Sanchar. Nigam Limited v. UOI, JT 2006 (6) SC 114, the Supreme Court has reiterated that the concept of composite contract enunciated in State of Madras v. Cannon Dunkerley & Co. (Madras) Ltd. has survived the 46th Constitutional Amendment service to a composite transaction not covered by Article 366(29A). The Supreme Court has explained the nature of a composite contract as under:
The reason why these services do not involve a sale for the purposes of Entry 54 of List II is, as we see it, for reasons ultimately attributable to the principles enunciated in Gannon Dunkerley's case, namely, if there is an instrument of contract which may he composite in form in any case other than the exceptions in Article 366(29-A), unless the transaction in truth represents two distinct and separate contract and is discernible as such, then the State would not have the power to separate the agreement to sell from the agreement to render service, and impose tax on the sale. The test therefore for composite contracts other than those mentioned in Article 366(29A) continues to he did the parties have in mind or intend separate rights arising out of the sale of goods. If there was no such intention there is no sale even if the contract could be disintegrated. The test for deciding whether a contract falls into one category or the other is to as what is 'the substance of the contract We will, for the want of a better phrase, call this the dominant nature test.
25. There is nothing in the Supreme Court decisions in the case of Builders' Association of India and Ors. v. Union of India and Gannon Dunkerley and Co. and Ors. v. State of Rajasthan and Ors. (1993) ISCC 364 which supports the appellant's stand that an individual works contract can be divided for the purpose of levying service tax. All the observation of the Supreme Court in these two cases are confined to the purpose of sales tax.
26. The judgment in the case of Kerala Colour Lab Association v. UOI 156 ELT 17 is not against the Respondents. In that, the Hon'ble High Court simply disregarded the aspect of works contract and decided on the basis that the entire activity of the assessee as it answers the description of taxable photography service. In the case of the Respondents, the construction of a plant on turnkey basis is the service. Such service is not taxable at present.
27. In Rolls Royce Inds. Power (India) Ltd. v. CCE , the Hon'ble CESTAT held that in a contract for operation and maintenance of power plant, the entire responsibility for generating and supplying power is with contractor. If there is any engineering issue arising during the discharge of the responsibility, it has to be sorted out and there is no service receiver for solving of engineering issues. Hence, no service tax is payable. In this judgment, the Hon'ble CESTAT rejected me SDR's contention about the 46th Constitution Amendment and held that the Apex Court's decision in Builders' Association of India and Ors. v. Union of India (supra) has no application as the deeming definition that exists in sales tax, is not there for the purpose of service tax.
28. In the last the learned advocate referred to the case of S. Krishna (1956) 7 STC 26 relating to drying of tobacco pointed out by the learned S.D.R. and stated that this decision of the Andhra Pradesh High Court has been overruled by the Supreme Court in the case of Government of Andhra Pradesh v. Guntur Tobaccos Ltd. 1965 (016) STC 0240-SC. The Supreme Court has observed that the finding recorded by the High Court that it was intended by the parties that the packing material should form an integral part of the process of re-drying and without the use of the packing material re-drying process could not be completed, and that there is no independent contract for sale of packing material. It is only as an incident of the re-drying process and as a part thereof that the respondent's company has to seal the package of tobacco, after it emerges from the reconditioning chamber with a view to protect it against atmospheric action. In the absence of any evidence from which contract to sell packing material for a price may be inferred, the use of packing material by the respondent-company must be regarded as in execution of the works contract and the fact that the tobacco delivered by the constituent is taken away with the packing material will not justify an inference that there was an intention to sell the packing material. (Page 138 of compilation)
29. In view of above it was submitted that the contract in the present case was for the purpose of construction of solvent dewaxing /deoiling unit at the Digboi Refinery and the other for construction of Hydrotreater. Amine treating unit, control room and sub-station for hydro treating facilities and the process design, detailed engineering was only incidental without which the contract could not have been completed and therefore the contract cannot be vivisected so as to charge service tax on the services rendered in respect of residual process design and detailed engineering.
30. As regards Petrofac, it was submitted that the facts are identical except that in this case even the amount of service tax said to be included in the lump sum price relating to residual process design and detailed engineering was not quantified. It was submitted that the entire arguments will in toto be applicable to this case also.
27. We have considered the submissions made by both the parties. We find that facts of the present case are squarely covered by the Tribunal decision in the case of Daelim Industrial Co. cited supra and the department's SLP in the case of Daelim Industrial Co. has been dismissed by the Apex Court. Further the decision of the Daelim Industrial has been followed by this Tribunal in the case of M/s L & T Ltd. Its ratio has also been referred to by the Gujarat High Court in the case of Elecon Engineering Co. Ltd. v. Union of India . Further in Ircon International Ltd. v. CCE, Mumbai 2002 (2) STT 264, Tribunal has held that construction contract could not be subjected to service tax as consulting engineering service, either as a whole or in part and further observed that position remains covered by the decision in the case of Daelim Industrial Co. cited supra. Revenue has not been able to distinguish the present contract, from that involved in Daelim case because the contract in the present cases are essentially for construction and not for the services and the services referred to are an integral part of contract. The contract is a work contract on a turnkey basis and not a consultancy contract. It is well settled by series of case laws that a work contract cannot be vivisected and part of it subjected to tax. The decision in the Associated Hotels case does not lend any support to the revenue as a solitary instance cited by the learned S.D.R. in the case of S. Krishna of Andhra Pradesh High Court has been undone by the Supreme Court in the Guntur Tobacco case cited by the appellants. The 46th amendment to the constitution has also not made any difference to the decision of Associated Hotels as it was mainly with respect to sales tax which introduced deeming provision which is not the case before us. The Kerala High court decision in Kerala Colour Lab Association cited supra also does not help revenue as in that case the principal contract was that of service and not of sale of photographic material and therefore it was correctly held that once the taxing event is rendering of service & the entire activity of the assessee answer the description of taxable photography service, it is the service which will be chargeable to service tax &the agreement cannot be considered as that of sale of photographic material. In the present case, the principal object of the contract is that of construction and not of rendering any service and accordingly service tax cannot be levied on service portion of the contract.
28. In view of above, we reject both the appeals and uphold the order of Commissioner (Appeals).
(Pronounced in Court)