Custom, Excise & Service Tax Tribunal
National Building Construction ... vs C.C.E.&S.T., Raipur on 23 December, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066. Date of Hearing 23.12.2014 For Approval &Signature of : Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes Appeal No.ST/1130/2010-CU[DB] [Arising out of Order-in-Original No.COMMISSIONER/RPR/35/2010, dated 03.05.2010 passed by the C.C.E., Raipur] National Building Construction Corporation Ltd. Appellants Vs. C.C.E.&S.T., Raipur Respondents
Appearance Shri JK Mittal, Advocate - for the appellants Shri Amresh Jain, DR - for the respondents CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order No.54958/2014, dated 23.12.2014 Per Shri R.K. Singh :
The appellants have filed the appeal against the Order-in-Original No.COMMISSIONER/RPR/35/2010, dated 03.05.2010 in terms of which a duty demand of Rs.7,87,18,207/- for the period December, 2004 to March, 2007 has been confirmed along with interest and equal amount of penalty under the Finance Act, 1994. An amount of Rs.3,46,33,141/- already deposited by the appellants has also been appropriated.
2. The brief facts of the case are that the appellants had received work order from M/s. BHEL for the work of Engineering Procurement & Construction of Civil Structural and Architectural Work of Main Power Plant including Engineering Design Procurement Supply of EOT Crate and Vibration Isolation System for 2 X 250 MW Unit Nos.1 & 2 at Korba (East) Project, Chhattisgarh. The total contract price for the entire scope of work for the package was Rs.1,53,59,35,000/-. The scope of work included construction of complete civil, structural and architectural works, which mainly included construction of main power house building, administration building, service building, foundations for various structures, drainage and sewerage, time office, canteen building, security house, watch tower, boundary wall, etc. and other miscellaneous auxiliary buildings/ structures, etc. and the major construction material, i.e., steel (reinforcement & structural) required for the purpose had been supplied/provided by M/s. BHEL to the appellants free of cost and remaining materials such as cement, sand aggregates, bricks, etc. and equipments, tools, spares, etc. had been procured/ purchased by the appellants and used in the said construction work.
2. The commissioner has held that the services were classified under Commercial or Industrial Construction Service (CICS) but disallowed the abatement of 67% from the gross amount of the contract under Notification No.15/2004-ST, dated 10.09.2004 on the ground that the value of free supplies has not been included in the gross amount charged and also found them guilty of wilful mis-statement and suppression of facts.
3. The appellants have essentially contended that the service was not liable to service tax prior to 01.06.2007 as it was under Works Contract service and they are also eligible for the benefit of 67% abatement under Notification No.14/2004-ST / No.1/2006-ST, as. they are covered by the Larger Bench decision of the Tribunal in the case of Bhayana Builders (P) Ltd. Vs. CST, Delhi [2013 (32) STR 49]. The ld. Departmental Representative conceded that the said judgment is applicable to the case.
4. We have considered the contentions of the appellants. As regards the contention that as the service was rendered under a work contract, the same is not liable to service tax prior to 01.06.2007 when works contract service [section 65(zzzza) of Finance Act, 1994] was introduced, it is to state that the classification of service is to be determined as per the definitions of various taxable services prevalent during the relevant period and merely because the classification changes with the introduction of a taxable service under which an existing service gets more specifically covered in no way means that the said service was not necessarily taxable during the period prior thereto. The Delhi High Court judgement in the case of G.D. Builders Vs. Union of India [2013 (32) STR 673 (Del.)] has categorically held that-
as per the provisions of Section 65(105)(zzq) and (zzzh), service tax is payable and chargeable on the service element of the contract for construction of industrial and commercial complexes and contract for construction of complexes and in case of composite contract, the service element should be bifurcated and ascertained and then taxed. The Honble High Court goes further to add that:-
the contention that there was/is no valid levy or the charging section is not applicable to composite contracts under clause (zzzq) and (zzzh) of section 65(105) stands rejected. Thus, the contention of the appellants is untenable.
5. However, as has been conceded by the ld. Departmental Representative, denial of 67% abatement by the adjudicating authority on the ground that value of free supplies was not included in the gross amount charged is no longer sustainable in the light of the CESTAT Larger Bench judgment in the case of Bhayana Builders (P) Ltd. (supra). Accordingly, we set aside the impugned order and remand the matter to the adjudicating authority for de novo adjudication inter alia giving effect to the CESTAT judgment in the case of Bhayana Builders (P) Ltd. (supra) for the purpose of deciding the appellants eligibility for 67% abatement under Notification No.15/2004 / No.1/2006 as the case may be. The adjudicating authority shall provide an opportunity of being heard to the appellants before de novo adjudication.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -2-