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2017 (4) TMI 903 - AT - Service TaxAgency fee - Consulting Engineer Service or not? - tripartite agreement - whether agency fee received by M/s. IRCON is bundled alongwith the cost of road project or is a separate fee received by them for providing consulting engineer service? - Held that: - The admitted facts are that there was a Tripartite Agreement dated 31.08.2004 for the construction/up-gradation/commissioning and maintenance of different road projects in the state of Bihar under PMGSY. Under the agreement, IRCON was selected as executing agency for construction/up-gradation/commissioning of the project - The appellants are neither the owner of the constructed roads nor do they construct the road themselves. They have merely provided the technical capabilities and expertise in the management and supervision of projects relating to construction of roads, for which they have received the agency fees. It is also clear from the Tripartite Agreement that the agency fee did not include the cost of road construction, materials or charges for the labour. It is also clear from the Clause 11.2 of the agreement that M/s. IRCONs fee covers the cost of the preparation of DPR, cost involved in inviting and deciding tenders but the cost does not covers the cost of advertisement of tenders in the news papers. In the same clause it is mentioned that latter shall form part of the project cost, which clearly shows that M/s. IRCON s fee is not part of the project cost. The receipt of consultancy fee from the Govt. of Bihar for the construction of rural roads was deliberately suppressed by the appellant and the appellants mis-declared the value of taxable consulting engineer services provided by them. Therefore, the penalty imposed is justified. Appeal dismissed - decided against appellant.
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