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M.P. Police Housing Corporation Ltd. Versus CCE & ST, Bhopal

2016 (9) TMI 690 - CESTAT NEW DELHI

Taxability of receipt of "Supervision Charges" on construction contract - demand under the category of Consulting Engineer as defined under section 65(31) of the Finance Act, 1994. - Held that:- by no stretch of imagination can the supervision charges paid to the appellant be considered as consideration received for rendering consulting engineer service inasmuch as the appellant corporation is made up of officers on deputation from the police Department and hence are not professionally qualified .....

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/Revenue, Shri Ranjan Khanna, AR ORDER The present appeal has been filed against the order dated 22th of October 2010, passed by the Commissioner, Bhopal. The M.P police housing corporation is an agency set up by the government of MP, for implementing the police force modernisation scheme of Central and State government. The appellant is a company incorporated under the companies act and its main objective is to formulate housing scheme for the benefit of employees of government of Madhya Prades .....

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ayouts and control of construction projects for building residential houses as well as administrative buildings for MP Police. Demand of service tax to the tune of ₹ 1.25 crores along with interest and equal amount of penalty stands confirmed against the appellant in the impugned order on the ground that they have rendered service under the category of Consulting Engineer as defined under section 65(31) of the Finance Act, 1994. 2. The impugned order has been challenged before us. The appe .....

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e government. The appellant is only an implementation agency and have carried out the work on behalf of the government. In the absence of a relationship between service provider and recipient, it cannot be said that technical consultancy has been rendered. They have also relied upon several case laws to support their case. 3. We have heard Shri Sanjay Kumar Tiwari, the learned counsel for the appellant as well as Sh. Ranjan Khanna, the learned DR for the revenue. 4. For better appreciation, we r .....

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rges have been paid to them would be liable to payment of service tax. 6. We have perused the Memorandum and Articles of Association of the appellant company, viz., The Madhya Pradesh Police Housing Corporation Limited. On a perusal of the same, it is clear that the appellant's objective is to undertake construction activities for and on behalf of Government of Madhya Pradesh for the police department. The appellant company consists of various working officers of the police department who ar .....

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ertaken any investigation to establish the nature of these supervision charges and why they have been paid to the appellant by the Madhya Pradesh government. Before alleging that these are payments received towards consulting engineer services, revenue should have looked into the basis for payment of such charges. We find that no such effort has been made by revenue. The claim of the appellant is that the supervision charges, which is worked out by the State Government as a certain percentage of .....

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