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2015 (9) TMI 1328 - CESTAT MUMBAI

2015 (9) TMI 1328 - CESTAT MUMBAI - 2016 (42) S.T.R. 77 (Tri. - Mumbai) - Erection, commissioning and installation service - Penalty u/s 76, 77 & 78 - Turnkey project - Works contract - Held that:- It is common practice while setting up large plants that the selection of supplier is recommended by the consultant who provides both technology as well as Design Engineering. Only because supplier of components is authorized in advance by the consultant does not mean that purchases were made by the c .....

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appellant. At the material time service tax was levied on receipt basis. And appellant have paid service tax on the amount received by them from their client M/s. Shreya Biotech Pvt. Ltd which is confirmed by M/s. Shreya Biotech Pvt. Ltd to the Commissioner. Therefore service tax has been correctly paid by the appellant.

Appellant were under a genuine misconception that turnkey projects, i.e. Works Contract projects were not leviable to the service tax as Works Contract came into the .....

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he Respondent : Shri Anupam Dighe, Adv ORDER Per: P S Pruthi: Revenue has filed this appeal against Order-in-Original dated 30/6/2009 in which the Commissioner confirmed duty amount of ₹ 57,19,730/-, appropriated the same amount as deposited by the appellant, dropped demand of ₹ 67,01,871/- and refrained from imposing penalties under Sections 76, 77 and 78 of the Finance Act, 1994. 2. The appellant entered into a turnkey contract with their client namely M/s. Shreya Biotech Pvt. Ltd. .....

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oner in adjudication proceedings, relying on the amendment to the contract in 2008 and also the fact that appellant had received the price for the service components of the contract only and the material and equipment were supplied directly by the suppliers to the client, confirmed duty demand of ₹ 57,19,730/-. He dropped demand of ₹ 67,01,871/- which was based on the supply and components portion of the contract. 2. Heard both sides. 3. Initially the client of the appellant had ente .....

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the original contract dated 17/10/1996. The addendum clearly shows that payment of direct purchases shall be made by the purchaser (which means client) to suppliers but and subject to contractor's (i.e. appellant) authorization in advance. 4. Revenue's argument is that suppliers of equipment/materials are approved by the appellant. We note that it is common practice while setting up large plants that the selection of supplier is recommended by the consultant who provides both technology .....

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