TMI Blog2013 (3) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... n that score alone the impugned order could be set aside. Regarding reimbursement of expenses - The appellant submitted that the handling and transportation charges paid to the appellant by BSNL has got no connection with the services rendered by the appellant to BSNL. These amounts are paid by BSNL for the specific purpose of handling and transporting the materials from BSNL to the site of work. - held that:- concur with the appellant that as they are rendering services in the category of consulting engineering services, handling and transporting the materials is not at all a part of such consulting engineering services. Regarding extended period of limitation - held that:- the appellant is a government enterprise and there cannot exist any intention to evade the service tax liability as claimed by them and hold that the entire Show Cause Notice is time-barred and hence the demand is not maintainable. - Decision of Hon’ble Supreme Court in the case of Collector v. Chemphar Drugs (1989 (2) TMI 116 - SUPREME COURT OF INDIA) followed - Demand and penalty set aside - Decided in favor of assessee. - 154/2011 (M ST) - - - Dated:- 29-8-2011 - Shri P. Ayyam Perumal, J. Shri A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess should not be demanded under proviso to Section 73(1) of the Finance Act, 1994. (ii) Interest at appropriate rate should not be charged under Section 75 of the Finance Act, 1994 on the demand of service tax and education cess made as above. (iii) Penalty should not be imposed under Section 76 and 78 of the Finance Act, 1994. After due process of law, the Lower adjudicating authority vide impugned order-in-original, confirmed the demand of service tax proposed in the SCN along with appropriate interest and also levied equal penalty under Section 78 of Finance Act, 1994. 3. It is against this order, the appellant is before this forum on the following grounds : (i) that the activity undertaken by the appellant are in the nature of turn key project, from the stage of design to actual execution. Turnkey projects are recognized as Works contracts under VAT legislation. Service tax on turnkey projects which are in the nature of works contracts was levied for the first time, w.e.f. 1-6-2007 only and prior to this date the appellant are not at all liable to pay any service tax. (ii) that without prejudice to the contention above, even if it is considered for arguments sake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is not liable to Service tax in terms of para 3(2) of Board s Circular No. 123/5/2010 TRU, dated 24-5-2010. 4.2 I have carefully gone through the case records and the submissions made during personal hearing. The issue to be decided in this case is whether - (i) the appellant is liable to pay service tax on the charges received from BSNL towards handling and transportation of materials to various sites, and (ii) the extended period is invokable in this case. 5. It is seen that the appellant has been paying service tax under the catetgory of Consulting Engineer s service in respect of service charges received from BSNL for rendering services such as supervision, management and execution of cable laying and associated works. The lower adjudicating authority vide impugned order in original classified the same under the category of Erection, Commission and Installation services . The appellant now contends that the services provided are in the nature of turnkey project and are recognized as works contracts under VAT legislation. The appellant further stated vide their consultant s letter dated 7-10-2010 that the activity of laying of cables alongside the road would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the LAA had held that the appellant is liable to pay service tax under Erection, Commissioning and Installation service . This observation is totally unsustainable as it is beyond the scope of the SCN as there was no proposal in the SCN agitating the classification of the taxable services rendered. The LAA in his detailed order had not discussed as for what reasons the activities of the appellant cannot be considered as alleged in the SCN i.e. handling charges. Thus I find that the lower adjudicating authority had traversed beyond the scope of the show cause notice and on that score alone the impugned order could be set aside. 5.4 Regarding the second issue, whether the demand is hit by time bar, I find that the SCN was issued on 26-9-2008 covering a period from 2003-2004 to 2006-2007 invoking the extended period. The only allegation in the SCN is that they have not disclosed the receipt towards handling charges realized from M/s. BSNL in their ST-3 Returns. It is not the Department s case that they have not registered with the Department nor they had not filed ST-3 returns. According to the appellant it was their bona fide belief that the above income which they call as re-imb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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