Custom, Excise & Service Tax Tribunal
M/S Siemens Ltd vs Commissioner Of Service Tax, Mumbai on 18 November, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. I APPLICATION NO. ST/MA(ORS)/94973/15 IN APPEAL NO. ST/33/11-Mum (Arising out of Order-in-Appeal No. RBT/64/2010 dated 29.10.2010 passed by the Commissioner of Central Excise (Appeals-IV), Mumbai Zone-I.) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) =====================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ===================================================== M/s Siemens Ltd. Appellant Vs. Commissioner of Service Tax, Mumbai Respondent Appearance: Shri Bharat Raichandani, Advocate for Appellant Shri D. Nagvenkar, Addl. Commr. (A.R.) for Respondent CORAM: HONBLE SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL) Date of Hearing: 18.11.2016 Date of Decision: 18.11.2016 ORDER NO. Per: M.V. Ravindran:
This appeal is directed against Order-in-Appeal No. RBT/64/2010 dated 29.10.2010 passed by the Commissioner of Central Excise (Appeals-IV), Mumbai Zone-I. Registry has listed miscellaneous application no. ST/MA(ORS)/94973/15 for disposal. We take up the miscellaneous application. It is seen from the contents of the miscellaneous application that the miscellaneous application is filed by the M/s Delhi Metro Rail Corporation Ltd. which seeks to be impleaded in the proceeding as they are final beneficiary of the appeal filed by M/s Siemens Ltd.
2. After hearing both sides, we hold this miscellaneous application is devoid on merits in as much as in the proceeding before the lower authorities, applicant M/s Delhi Metro Rail Corporation Ltd. was never a party. The miscellaneous application is disposed of.
3. We take up the appeal for disposal.
4. Heard both sides and perused the records.
5. Appellant had filed a refund claim on the ground that the lower authorities has rejected the claim for refund of an amount of Rs. 2,01,14,891/-, on the ground that the said Service Tax was paid by them inadvertently on the invoices issued to M/s Delhi Metro Rail Corporation Ltd. (hereinafter referred to as DMRC), as the said Service Tax is not payable in view of the fact that the contract in question is a turnkey contract and cannot be vivisected. The adjudicating authority rejected the said refund claim on the ground that reliance placed by M/s Siemens Ltd. on the judgement of the Tribunal in the case of M/s Daelim Indl. Co. Ltd. is misplaced and in respect of Installation & Commissioning Engineer services in the case in hand Service Tax is paid under Erection Commission and Installation services and relied upon the judgment of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India [2006 (2) STR 161], wherein it was held that the contract cannot be vivisected for levy of Service Tax.
6. On careful consideration of the submissions made by both sides and perusal of records, we find that there is no dispute as to the fact that contract which was awarded to appellant is a turnkey contract for completing the project of DMRC. We find strong force in the contention raised by the learned Counsel that an identical contract for civil contract awarded by DMRC to Afcons infrastructure Ltd. which was sought to be tax after vivisection said contract by the department. The said Afcons infrastructure Ltd. aggrieved by the adjudicating authoritys order confirming the demand, was in appeal before the Tribunal in appeal No. ST/362/11 which was disposed of by the Bench vide final Order No. A/1583-1590/13/CSTB/C-I dated 04.07.2013 as reported at 2013-TIOL-1225-CESTAT-MUM. We find that the ratio of the said judgment of the Tribunal in paragraph no. 5.1 to 8 are very relevant which we respectfully reproduce.
5.1 The definition of Commercial and Industrial Construction Service' as provided in section 65(25b) excludes such activities relating to roads, ports, railways, dams, bridges, tunnels etc. There is no distinction between a monorail or metro rail or any other kind of rail and, therefore, the term railways' used therein has to be given its widest meaning to include all types of railways and all types of railway lines. Therefore, the distinction sought to be made by the adjudicating authority is not sustainable in law.
5.2 Secondly, we do not find any basis for the conclusion drawn by the learned adjudicating authority by referring to some decision of the Government while examining the scope of the terms railways' in the context of certain tax exemptions. There is no evidence before us to show that the Government examined the matter and came to such a conclusion nor is there any circular or notification issued by the Government in this regard. In the absence of any such decision which is in the public domain, we are unable to accept the contention raised by the Revenue in this regard and reject the same totally. In other words, the law has to be interpreted as it stood, as held by the hon'ble Apex court in the case of Doypack Systems Pvt. Ltd. [1988(36) ELT 201(SC)] = (2002-TIOL-389-SC-MISC) wherein it has been held that the notings in the government files are not relevant for interpretation of the statutes and the statute has to be interpreted by the wordings explicitly used therein and if there is no ambiguity in the language used therein, there is no need to refer to the notings in the government file. On that ground also, the observation of the adjudicating authority has no bearing to the facts on hand and has to be rejected.
5.3 The learned adjudicating authority has relied on the definition of Section 65D(o) in the context of transportation of passengers by various modes such as monorail, tramways, metro rails etc. This definition came into force only w.e.f 01/07/2012 but the demands in the impugned order pertain to the period prior to 01/07/2012 and, therefore, this definition has no bearing whatsoever and no applicable for interpreting the law as it stood at the relevant time.
5.4 The hon'ble High Court of Delhi in the DMRC's case (supra) has held that Delhi Metro Rail is Government Railway as defined in the Indian Railway Act. If that be so, the question of levy of service tax under Commercial or Industrial Construction Service' would not arise at all as such constructions in respect of Railways stands excluded from the scope of the levy.
6. The hon'ble Apex Court in the case of State of Uttar Pradesh vs. Mohammed Nooh - 1958 (1) SCR 595 held that justice should be done in a common sense point of view stating that "I see no reason why is a narrow or ultra technical restriction to be placed on them. Justice should, in my opinion, be administered in Tribunal or courts in a common sense liberal way and by broad based to the human value other than of narrow and restricted consideration hedged around with hell and technicality" The above principles laid down by the Apex court needs to be followed by all the subordinate courts while interpreting the statute.
7. It is also a well known fact that the Indian Railway itself is an organization, which is meant to run on commercial basis. Recognizing these facts, there is a provision for a separate Railway-Budget to be presented before the Parliament and whenever there is a surplus, the Railways declared a dividend and pass it on to the Consolidated Fund of India. Therefore, the argument that only DMRC is run on commercial basis and not Indian Railway, is not an acceptable proposition. In view of the specific exclusion of railways' from commercial and industrial construction service, the question of imposing any Service Tax on the railways run by the DMRC does not arise at all.
8. During the course of arguments, the learned Commissioner (AR) also relied upon Notification no. 12/2012-ST, which provides for exemption from Service Tax, the services provided by way of construction, erection, commissioning and installation of original works pertaining to Railways, including monorail or metro. This exemption was provided when all services were brought under tax net except those specified in the negative list w.e.f 01.07.2012. This exemption also clearly indicates the legislative intent of not taxing construction work pertaining to Railways.
7. Since the issue involved in the case is in respect of very same DMRC but a construction company for civil contract. As such contract cannot be vivisected, the impugned order is to be held as unsustainable.
8. Be that as it may, we find strong force in contention raised by the learned Counsel for appellant that the issue is now squarely settled by the decision of the Hon'ble Apex Court in the case of Commissioner of Central Excise & Customs, Kerala Vs. Larsen & Toubro Ltd. [2015 (39) STR 913 (S.C.)], wherein Hon'ble Apex Court has specifically settled the law that in works contract, there cannot be vivisection and calculation of tax under various categories of services.
9. In view of the foregoing and facts and circumstances of this case, we hold that the impugned order is unsustainable and liable to be set aside. The impugned order is set aside and the appeal is allowed with consequential relief.
(Operative portion of the order pronounced in open Court) (C.J. Mathew) (M.V. Ravindran) Member (Technical) Member (Judicial) Sp 2 APPLICATION NO. ST/MA(ORS)/94973/15 IN APPEAL NO. ST/33/11-Mum