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2018 (12) TMI 1188 - AT - Service TaxWorks Contract - EPC contracts - period from 2006-07 to 2010-11 - liability of service tax. Period prior to 01.06.2007 - Held that:- It is on record that the work executed on these contracts is works contract and on perusal of the same it is so, and if that be so, the law which is settled by the Apex Court in the case of Larsen and Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT] would cover the issue in favour of the appellant - service tax liability prior to 01.06.2007 on the turnover of ₹ 12.35 crores is unsustainable and liable to be set aside. Service tax liability post 01.06.2007 - works contract executed on behalf of Dakshin Infrastructure Pvt Ltd and Aparna Infra-housing Pvt Ltd. - Held that:- The contract entered into by the appellant with M/s Sudhama Projects Pvt Ltd indicate clearly that the appellant had agreed to sub-contract the entire work to sub-contractor M/s Sudhama Projects India Pvt Ltd [which subsequently became Poulomi Infra Pvt Ltd]. The said sub-contract entered into by the appellant with M/s Sudhama Projects in clause No 9 specifically indicates that sub-contractor is required to discharge sales tax and service tax on the completed works as applicable under the relevant Act. Subsequently, a certificate issued by M/s Sudhama Projects (now Poulomi) indicates that service tax liability on the entire contracted value has been discharged and enclosed the details of challan. The service tax liability on the contract executed by Sudhama Projects for the period post 01.06.2007 seems to have been discharged and the reference to challan No. and other payments are given in the statements annexed to the letter. Once the service tax liability due on the entire contract executed by sub-contractor is discharged, there is no reason for demand of any further service tax from the appellant - the service tax liability demanded from the appellant is liable to be set aside. Turn-over of the projects executed for APIICL, KTPS APSHCL and Software Engineer Employees Housing Association - Held that:- This issue needs to be addressed independently. Projects executed by the appellant for APSHCL and APIICL for the period 2010-11 - Held that:- From 01.06.2007, though works contracts are taxable, they would not be excisable if the services thereby is primarily for non-commercial, non-industrial purposes - In the case in hand, there is no allegation nor there is any finding as to the commercial nature of the buildings or the civil structure, constructed by the appellant for APSHCL and APIICL. Thus, on this ground, the demands raised on the appellant needs to be set aside - On limitation also, the demands fails for APIICL and APSHCL up to 2009-10. Liability of service tax - consideration received by the appellant for executing the projects given to them by KTPS - Held that:- The demand on the appellant for rendering services to KTPS, being rendered to generation of electricity which is must for transmission of electricity, is covered by the ratio and 11C Notification - It is nobody’s case that KTPS is not producer of thermal electrical energy and electricity being an item that cannot be stored requires immediate transmission and distribution. In our view this activity of rendering service to KTPS would be covered by retrospective Notification No 45/2010 dated 20/07/2010 - demand set aside. Service tax liability - services rendered to Software Engineers Employees Housing and Welfare Association - Held that:- There is nothing on record to show that the said Software Engineers Employees Housing and Welfare Association was for non-commercial and non-industrial purposes and in our view, the turn-over needs to be taxed under works contract services. However, the service tax liability needs to be limited to only 30% of the value of the total consideration received as we find from the C.A’s certificate that the materials used for executing such a contract could be of value of 70% of the contract amount - Upholding the tax demand, but reducing it to 30% of the value of the contract, we hold that appellant has to discharge the service tax liability along with interest on this amount - penalty also set aside. Liability of service tax - transportation of goods by road - Held that:- The argument of the learned counsel that the transportation of materials was within the site and hence not taxable is unacceptable in the absence of any evidence to show that it was so - in the absence of any evidence, the service tax liability of ₹ 6,89,387/- on the amount paid for transportation of goods by road needs to be upheld along with interest and also the penalty imposed thereon. Appeal disposed off.
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