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SMS Infrastructure Limited Versus Commissioner of Central Excise & Customs Nagpur

2016 (9) TMI 843 - CESTAT MUMBAI

Demand of service tax on advances received - works contracts - it was contended that these are payments received towards obtaining necessary equipment and creating basic facilities before the commencement of rendering of service. - Held that:- advances made cannot be subject to tax if such advances are adjusted against dues for rendering of service as that would amount to double taxation. - Decision in the case of Thermax Instrumentation Ltd v. Commissioner of Central Excise, Pune [2015 (12) TMI .....

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ective heads. We are, therefore, left to examine in detail the submissions made in connection with the construction of railway sidings and the sinking of the mine shaft on which, admittedly, the appellant has not effected any payment of tax. - Demand alongwith interest and penalties - work related to mines - Held that:- in the light of a subsequent entry to tax 'mining service' by section 65(105)(zzzy) of Finance Act, 1994 with effect from 1st June 2007 which was intended to cover all activi .....

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s with public investment and private investment and both function under the same statute. Such railways established in the private sector have a statutorily acknowledged Administrator. Consequently, we too hold that railway sidings built by the appellant fall within the exclusionary portion of section 65(25a) and are outside the ambit of taxation. - Therefore, the liability to tax on the labour portion of work executed by the appellant and which has been duly discharged by them are confirme .....

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sioner of Central Excise & Customs, Nagpur in relation .to various activities undertaken by them and incomes received as providers of service. They are, primarily, contractors for infrastructure projects and the demands pertain to alleged non-payment of tax under Finance Act, 1994 by them. The first appeal is directed against order no. 09/ST/2010/C dated 29th October 2010 which has confirmed a total amount of ₹ 28,48,55,027/-as tax due besides interest and imposing penalties under sect .....

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orporation and it is alleged that tax of ₹ 121,66,560/- has not paid by the appellant on the value of services rendered between 2004-05 and 2006-07. The second component of ₹ 22,31,03,573/- relates to construction of civil structures and erection, commissioning and installation services rendered to M/s Maharashtra Enviro Power Ltd, M/s Vidharbha Enviro Power Ltd and at certain project sites at Raipur and it is alleged that the appellant had discharged tax liability without including .....

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ands ₹ 4,96,78,270/- towards construction of railway sidings for M/s MAHAGENCO and ₹ 4,14,14,117/- towards tax unpaid on mobilization advance received from principals with whom contracts were entered into. An amount of ₹ 2,44,52,615/- was demanded on account of outstandings from associate concerns. 4. Learned Senior Advocate presenting the case of the appellant has focussed on the taxes confirmed in relation to construction of railway sidings in both orders and the work related .....

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ty on the labour contract had been discharged at the appropriate time and that the cost of goods involved were, in accordance with section 67 of Finance Act, 1994, correctly excluded. As far as mobilization advance is concerned, it is contended that the adjudicating authority failed to appreciate the submissions made by -the assessee to the effect that these are payments received towards obtaining necessary equipment and creating basic facilities before the commencement of rendering of service. .....

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ng discharged upon receipt of dues as prescribed in the statute upto May 2008; consequently, there is no outstanding due. Learned Authorised Representative was not in a position to convince us that these submissions were incorrect. Accordingly, we hold that the dues that were liable to be discharged by various payments made as claimed in the appeal and as recorded in the impugned orders on the respective heads. We are, therefore, left to examine in detail the submissions made in connection with .....

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he Coal Mines (Nationalisation Act, 1973, Learned Authorized Representative contended that mines are excavations and shafts are the connection between the surface of the earth and the location of the coal seams and that these definitions would indicate that section 65(105)(zzzy) of Finance Act, 1994 is intended to tax services rendered in an existing mine. That submission does not convince because the statute referred to was enacted with the object of nationalising existing coal mines and, there .....

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39;mining service' by section 65(105)(zzzy) of Finance Act, 1994 with effect from 1st June 2007 which was intended to cover all activities relating to mineral exploration and extraction under one head as a consolidation entry, the actual sinking of a shaft cannot be treated as 'site formation and clearance service' but as related to excavation of mineral from the mine. Consequently, we are in agreement with the appellant that the demand for the disputed period is not valid. 7. On the .....

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e railway network as well as its integration with the existing infrastructure. The relevant sub-clause in section 65 of Finance Act, 1994 which defines 'commercial and industrial construction is: '(25b) "Commercial or Industrial Construction " means - (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall cov .....

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ed, primarily in, commerce or industry, or work intended for commerce or industry, but does not include suck services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams; and '(105)(zzq) Taxable Service means any service provided or to be provided to any person, by any other person, in relation to commercial or industrial construction ' 8. Learned Authorised Representative places reliance on the decision of this Tribunal in AB Projects Pvt Ltd .....

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