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TMI ID= 210832
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2012 (2) TMI 298 - CESTAT, NEW DELHI

CCE., Bhopal Versus Bharat Heavy Electrical Ltd.

Turnkey Projects - Composite Contracts - Consulting Engineering Services - first appellate authority held turnkey contract can be vivisected - allowed the appeal on merit but also on limitation Held that:- earlier & present show cause notices demonstrates that activities of the appellant was well within the knowledge of the Department. When Revenue intended the respondents to be taxed under the category of Consulting Engineer Service , they should have issued notice forthwith. Therefore, the first Appellate order granting relief to respondent on time bar does not appear to be erroneous Appeal dismissed.

No.- Service Tax Appeal No.339 of 2008

Dated.- January 11, 2012

Citations:

  1. CCE, RAIPUR Versus M/s BSBK PVT LTD - 2010 (5) TMI 46 - CESTAT, NEW DELHI - LB

Mr. D.N.Panda, Mr. Rakesh Kumar, JJ.

Shri R.K. Gupta, A.R. for the Revenue

Shri Z.U. Alvi, Advocate for the respondents  

Per Mr. D.N. Panda:  

Revenue is in appeal against the first Appellate order submitting that the contract which comprised various sub-activities and called for taxation under different clauses of taxable entries under Section 65(105) of the Finance Act, 1994, on the misconception that the entire contract being turnkey is not subjected to vivisection allowed appeal of Assessee.  

2. Learned Counsel for the respondents submits that vivisection of the contract is permissible in view of the Larger Bench decision in the case of C.C.E., Raipur vs. BSBK Pvt. Ltd. reported in 2010 (253) ELT 522 (Tri.-LB). Learned Commissioner (Appeals) did not commit any error of law allowing the appeal. It was further submitted that not only the first appellate authority allowed the appeal on merit but also on limitation. He invited attention to para 3 (xi) and (xii) at page 6 of the first Appellate authority s order to be read with para C.2 and B.2.2 of the notes of the argument filed in the course of hearing to submit that the proceeding was time barred and that was properly considered by learned Commissioner (Appeals). He further clarified that activities carried out by the Appellant during the intervening period i.e. 1.7.2003 to 9.9.2004 falls in between two periods from 1.4.2001 to 31.3.2003 and 10.9.2004 to 30.9.2006 which were subject matter of show cause notices dated 8.4.2004 and 19.4.06. When the material facts were known to the Department since BHEL is a giant sector and its activities are scrutinized by Authorities, the facts and circumstances did not give rise to suppression of facts for taxing under Finance Act, 2004. He reiterates that the proceeding was time barred.  

3. On the aforesaid factual matrix, when two show cause notices aforesaid are compared with present show cause notice, the sum and substance of the case demonstrates that activities of the appellant was well within the knowledge of the Department. When Revenue intended the respondents to be taxed under the category of Consulting Engineer Service , they should have issued notice forthwith. Therefore, the first Appellate order granting relief to respondent on time bar does not appear to be erroneous for which that does not call for interference. Accordingly, Revenue appeal is dismissed.  

 
 
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