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TMI Blog2015 (4) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for three numbers of main river crossing tower and open foundation for two numbers of anchor towers of 220 KV/DC transmission line crossing overhead across the river Budhi Gandak at Khagaria and for construction of two numbers of well foundation and modification of two numbers existing well foundation of special river crossing of 132/33 KV D/C Transmission Line across river Kosi near Kursela bridge. The work was successfully carried out over a protracted period of time till the year 2009 for which payments were received by the petitioners from time to time from the Board. With effect from 1.6.2007 the service provision part of the work contract became exigible to service tax and pursuant to a notice from the Central Excise and Service Tax Authorities, the petitioners had ultimately to pay the aforesaid amount of service tax. The petitioners approached the respondent-Board for reimbursement of the service tax amount paid which has been refused by letter dated 21.10.2010 of the Additional Chief Engineer (Civil) of the Board stating that in terms of Chapter-X, Instruction to Tenderer Clause 1 of the Contract Agreement, the petitioners were not entitled to any such payment of rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the petitioners, in support of which he relies upon a decision of the Supreme Court in the case of Bank of India & anr. Vs. K.Mohandas & Ors.: (2009) 5 SCC 313, in para-32 of which it has been held as follows:- "32. The fundamental position is that it is the banks who were responsible for formulation of the terms in the contractual Scheme that the optees of voluntary retirement under that Scheme will be eligible to pension under the Pension Regulations, 1995, and, therefore, they bear the risk of lack of clarity, if any. It is a well-known principle of construction of a contract that if the terms applied by one party are unclear, an interpretation against that party is preferred (verba chartarum fortius accipiuntur contra proferentem). Learned counsel also submits that under Section 64A of the Sale of Goods Act, unless a different intention appears from the terms of the contract, the liability of any new tax or increase or decrease in an existing tax like duty of customs or excise or tax on sale and purchase of goods, the liability or benefit of such increase would fall upon the respective person. It is submitted that in the present matter since the service tax has been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the receipt of notice the petitioners have made the payments of the service tax which was the liability of the petitioners and not of the Board. Learned counsel relies upon Clause 1 of Chapter-X of Instructions to Tenderers in support of the stand of the Board stating that rates had to be indicated for each item of work indicating all minute ingredient of each item directly or indirectly including all incidental items not shown or specified but reasonably implied or necessary for completion of the work. It is further submitted that in case of any doubt the same had to be clarified before submitting the tender which has not been done by the petitioners. Learned counsel further submits that there is absolutely no ambiguity in the said Clause 1 of the Instructions to the Tenderers and thus the principles laid down in the case of Bank of India Vs. K. Mohandas (supra) are not at all applicable in the present matter. The provisions of Service Tax were introduced by the Finance Act, 1994. However, the same at that time applied only to a limited number of items and not to all forms of service. Subsequently, from time to time a large number of services were brought under the scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery person liable to pay service tax which means the person who provides the service. There is further liability on the person providing service to furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed. There is also provision of recovery of service tax not levied or paid or short levied or short paid or erroneously refunded from the service provider under Section 73 of the Act. Section 73A provides that a person who is liable to pay service tax and has collected any amount in excess shall forthwith pay the amount to the credit of the Central Government. Thus, from the scheme of the Finance Act, 1994 which introduced the concept of service tax and the liability for payment of service tax, it is evident that so far as the Act is concerned, the liability of paying the service tax has been fixed upon the service provider. True, it is that the service provider has the right to collect the said tax from the person to whom service is provided but so far as the Excise and Service Tax Department is concerned, it holds the provider of service as liable to pay the service tax. There is no provision in the said Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitting the tender. Therefore, there should be no scope for any doubt or ambiguity regarding non-inclusion of any ingredient of work in the rate quoted by the Contractor." From perusal of the aforesaid provision this Court is unable to accept the submission of learned counsel for the petitioners that the same does not relate to rates and is only for items. It is evident from Clauses 1,2 and 3 that all of them relate to the rates quoted for each item of work and not for any specific ingredients of the work. Thus, splitting any item mentioned in Bill of Quantities has been specifically forbidden. Reasonably interpreted the said provisions mean that the rates or items of work, including all items of the work not shown or specified but reasonably implied or necessary, have to be indicated in the rates to be quoted by the tenderers. It would thus include the tax liability that fall upon such items of work whether they are in the nature of excise or customs or tax on sale or purchase of goods. Although service tax was not leviable at the relevant time on works contract but the same would also be deemed to have been included in view of the clear provision that the rate should be inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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