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2015 (9) TMI 1328 - AT - Service TaxErection, commissioning and installation service - Penalty u/s 76, 77 & 78 - Turnkey project - Works contract - Held that:- It is common practice while setting up large plants that the selection of supplier is recommended by the consultant who provides both technology as well as Design Engineering. Only because supplier of components is authorized in advance by the consultant does not mean that purchases were made by the consultant. Further we find nothing wrong in modifying and amending an agreement to suit both parties. What needs to be examined is actual service provided by the appellant. In this case, as a result of the amendment, the actual services provided by the appellant related to services of testing and other related service through which gave their expertise to their client. - The issue is the amount actually received from their client i.e. M/s. Shreya Biotech Pvt. Ltd for the service provided by the appellant. At the material time service tax was levied on receipt basis. And appellant have paid service tax on the amount received by them from their client M/s. Shreya Biotech Pvt. Ltd which is confirmed by M/s. Shreya Biotech Pvt. Ltd to the Commissioner. Therefore service tax has been correctly paid by the appellant. Appellant were under a genuine misconception that turnkey projects, i.e. Works Contract projects were not leviable to the service tax as Works Contract came into the fold of service tax on 1/6/2007. Keeping the entire circumstances of the case in view, we find that Commissioner has quite appropriately exercised his discretion under Section 80 on the basis of "reasonable cause” for waving penalties under Section 76, 77 and 78. - Decided against Revenue.
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