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2016 (3) TMI 899 - CESTAT MUMBAI

2016 (3) TMI 899 - CESTAT MUMBAI - TMI - Demand of Service tax - Erection, installation and commissioning service - Appellant contracted with M/s MSETCL, which is work to be executed on turnkey basis in accordance with the composite contract comprising supply of components as well as labour - Held that:- turnkey contracts also include supply of goods necessary for execution of the projects. It is a normal practice in such a contract to provide a detailed breakup, with invoices raised to mirror t .....

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ating to' is very wide in its amplitude and scope. Therefore, all taxable services rendered in relation to transmission/distribution of electricity would be eligible for the benefit of exemption under the said Notification for the period prior to 27.02.2010. Also in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the said Finance Act, the Central Government hereby directs that the service tax payable on said taxable services re .....

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issioning service' is incorrect. Since the project is in relation to transmission and distribution of electricity up to 26th February 2010, the demand for service tax is not correct in law. - Decided in favour of appellant with consequential relief - Appeal No. ST/187/2009 - A/85493/16/STB - Dated:- 19-8-2015 - M V Ravindran, Member (J) And C J Mathew, Member (T) For the Appellant : Shri Vinay Jain, CA For the Respondent : Ms. P. V. Sekhar, Dy. Commissioner (AR) ORDER Per C J Mathew M/s Richards .....

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rvice . The appellant undertook construction of power transmission lines from Nagothane to Wadkahal sub-station for the Maharashtra State electricity Transmission Company Ltd. (MSETCL) at an estimated cost of ₹ 554 crores to be completed within fifteen months from the date of contract i.e. 8 th May 2006. The turnkey project was to be executed in accordance with the composite contract comprising supply of components as well as labour. Though appellant discharged service tax liability of  .....

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ed with the original authority. 4. The appellant is before us contesting the impugned order on the ground that it is not a speaking order as the various submissions made by them had not been considered and disposed off by the first appellate authority. The appellant also claims that it was improper on the part of the first appellate authority to vivisect an indivisible composite contract and subject the presumed value of service therein to tax. It is also contended that the break-up of the contr .....

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d "specific break up in the invoice is also incorrect. 5. From the records it is apparent that the appellant contracted with M/s MSETCL after following due process of tendering which, admittedly, is work to be executed on turnkey basis. Accordingly, while it may comprise performance of a number of services the actual composition of the service is no means susceptible to segregation. Admittedly, turnkey contracts also include supply of goods necessary for execution of the projects. It is a n .....

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y a portion of the work as erection, installation and commissioning service'. Learned Counsel has drawn our attention to the decision of the Tribunal in Kedar Constructions vs. Commissioner of Central Excise, Nagpur [2015 (37) STR 631 (Tri-Mumbai)] wherein in para it was held: 5. We notice that out of the total demand confirmed of ₹ 2,04,14,368/- bulk of the demand of ₹ 1,90,47,124/- pertains to Commercial or Industrial Construction service rendered to Maharashtra State Electrici .....

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T 0201 (SC)]. Therefore, all taxable services rendered in relation to transmission/distribution of electricity would be eligible for the benefit of exemption under the said Notification for the period prior to 27.02.2010. 6. Further the decision of this Tribunal in Noida Power Co. Ltd. vs. Commissioner of Central Excise 2014 (33) STR 383 (Tri-Del) was also cited besides Notification 45/2010-ST dated 20 th July 2010, which states: "Electricity - Exemption to all taxable services relating to .....

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to any other person (hereinafter called 'the service receiver'), and that all such services were liable to service tax under the said Finance Act, which were not being levied according to the said practice during the period up to 26 th day of February, 2010 for all taxable services relating to transmission of electricity, and the period up to 21 st day of June, 2010 for all taxable services relating to distribution of electricity; Now, therefore, in exercise of the powers conferred by se .....

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ty during the aforesaid period. 7. The appellant has also cited the decision of the Tribunal in Commissioner of Central Excise & Customs, Vadodara vs. Larsen & Toubro 2006 (4) STR 63 (T) which held in para 31 as: "31. We have considered the submissions made by both the parties. We find that facts of the present case are squarely covered by the Tribunal decision in the case of Daelim Industrial Co . cited supra and the department's SLP in the case of Daelim Industrial Co . has be .....

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e, either as a whole or in part and further observed that position remains covered by the decision in the case of Daelim Industrial Co . cited supra. Revenue has not been able to distinguish the present contract from that involved in Daelim case because the contract in the present cases are essentially for construction and not for the services and the services referred to are an integral part of contract. The contract is a work contract on a turnkey basis and not a consultancy contract. It is we .....

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