Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Sepco Electric Power Construction Corporation Versus CCE, Raipur

2015 (12) TMI 1058 - CESTAT NEW DELHI

Demand of service tax - Consulting engineer service - Held that:- Appellant was given the work which included design, engineering, procurement, manufacture, supply, civil works, erection, testing commissioning, reliability run, demonstration of performance guarantees as well as total project management in an integrated manner and on turnkey basis, and any other works reasonably required for the completion of the Facility and/or for safe, trouble free, normal operation of the facility. Therefore, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

case is August 2003 to November 2005. Thus during the relevant period, the appellant being a body corporate was not covered under the definition of consulting engineer as per the above quoted judgement of Delhi High Court and consequently, the service rendered by the appellant could not be classified under Consulting Engineer Service under which the impugned demand is confirmed. - impugned demand is not sustainable. - Decided in favour of assessee. - Appeal No. ST/136/2007 with ST/Misc./55023/20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he ground that the appellant had provided consulting engineer service to M/s BALCO in terms of Contract No. BALCO-SEPCO-02 for engineering and technical services for the captive power projects. 2. Ld. Advocate for the appellant has essentially argued/ contended that : (1) It had a contractual obligation with BALCO to procure, set up and bring into commercial operation captive power plants at their site. The scope of activities included design, engineering, procurement, manufacture, supply, erect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

LCO-SEPCO-03: On shore Supply contract for the Captive Power Plant Project Contract No. BALCO-SEPCO-04: On shore Services & Construction Contract for the Captive Power Plant Project (3) As per the bidding document issued by BALCO the scope of work was described as under : The scope of Works of SEPCO, in accordance with the Specification for EPC Contract attached to the Notice inviting Tender issued to SEPCO on 4th February, 2002, shall include planning, design, engineering, project managemen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ll also be responsible for the successful execution of performance guarantees tests for the entire Plant. (4) The price as per bidding document was quoted on a turnkey basis for the entire project at US D 228923000/- and the payments were depending upon various stages of completion of project as a whole. The performance parameters were also stated unit wise for each unit and the bank guarantee of 10% of the total contract price was for the entire project. The time schedule is indicated unit wise .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment, we are satisfied that the contract though, for the sake of convenience, was split up into four sub- contracts (viz. the four work/ purchase orders), was a composite contract executable on a turnkey basis. The terms of this turnkey contract were reduced into writing by the "wrap-around agreement" of 10.5.2000. We are of the definite view that under the "wrap-around agreement", the Appellant had the right to encash any or all of the guarantees for any breach in any of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt and also for securing due performance of the contract. Ld. Advocate for the appellant stated that the principle set out in the foregoing para of Supreme Court judgement in case of Fenner India Ltd. (supra) is applicable to the present case also. He also referred to the judgement of Tribunal in the case of CCE & Customs, Vadodara Vs. Larsen & Toubro 2006 (4) STR 63 (Tri.-Mumbai) wherein the ld. DR s argument that when the value of the goods is separately mentioned in a composite contra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntracts and the contract in question was purely a sweat contract and did not involve supply of any goods at all. Each contract laid down its own terms and conditions and its own scope of work, responsibility and obligation value etc. and therefore the judgements cited by the appellant are not applicable. The manner of payment or the enforceability provisions do not take away from the fact that the contract in question was an independent legally enforceable contract and the service rendered there .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e, normal operation of the facility. Therefore, there is force in the appellant s contention that merely because it had entered into four contracts for completing the scope of work would not take away from the fact that it was an operation of erection and commissioning on a turnkey basis and therefore the service rendered was works contract service which was not liable to service tax prior to 1.6.2007 in the light of the judgement of Supreme Court in the case of Larsen & Toubro (supra). Howe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ax as sale of goods, and ii. such contract is for the purposes of carrying out,- a. erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r commissioning (EPC) projects The particular contract under consideration is however not a works contract per se, because there was no transfer of property in goods involved in the execution of that contract. The contention of the appellant is that it entered into four contracts for the sake of operational convenience and the total work was essentially an EPC/turnkey project involving transfer of property in goods leviable to sales tax and what is taxable is not a contract but the taxable servi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unnecessary in this case for reasons that follow. 6. The impugned demand has been confirmed under Consulting Engineer Service. Definition of consulting engineer during the relevant time as given under Section 65(31) of the Finance Act, 1994 was as under : Consulting engineer" means any professionally qualified engineer or an engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to any person in one or more disciplines of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4. It may be relevant to point out that the words an engineering firm appearing in the above definition, were substituted by the Finance Act, 2006 with effect from 1-5-2006 with the words any body corporate or any other firm . It is, therefore, clear that the expression any body corporate was introduced with effect from 1-5-2006. But, in the present case, the relevant period is 1997-2001. At that point of time, the expression any body corporate was not included in the said definition of consulti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version