TMI Blog2017 (10) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)], the said amount cannot be included in the assessable value for the purpose of payment of duty - The value of free supply material cannot be included in the value for the purpose of charging service tax - demand set aside. In respect of Multipurpose Hall of Municipal Council Umred and Multipurpose Hall and Library Building Construction for PWD, Nagpur, the appellant have contended before the Commissioner that the said construction is not of commercial nature - Held that: - It is seen that in this regard the order of Commissioner is not a speaking order as it gives no finding in respect of Multipurpose Hall and Library building constructed for PWD, Nagpur - In view of the clear cut Certificate the same cannot be treated as commercial building attracted service tax in the category of commercial and industrial construction. The certificate issued from the office of Municipal Corporation, Umred dt. 30.4.2012 also certifies that it is used for public utility and no revenue generated from the same. In view of this certificate, it is apparent that no tax under the category of commercial and industrial construction can be demanded in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Service. Appeal has also been made against imposition of penalty under Section 76, 77 78 of the Finance Act, 1994. 2. The Ld. Counsel for the appellant argued that the appellant is engaged in the business of construction (civil work) and is providing service of clients like M/s. BSNL, WCL, INDO UNIQUE FLAME LTD. RTO, Municipal Council Umred etc. for civil work at BSNL Chandrapur, Construction of Coal Washiery at Ghugus, strengthening of EOT crane girders in electrical and machine shop of WCL central workshop Tadali, Construction of Multipurpose hall for Municipal Council Umred and construction of testing track of RTO Chandrapur. The activities being repair to major bridge and repair of compound wall at Government Engineering College at Chandrapur. The appellants are also engaged in construction of complex service and have constructed residence quarters for clients namely M/s. Nagpur Housing and Area Development Board, WCL and PWD. The appellant were neither registered under any of the category of service nor were they filing ST.3 Returns. The appellants were issued show cause notice in respect of the service provided. The said show cause notice was confirmed by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther argued that the impugned order has been issued denying benefit of notification No.1/2006 dt. 1.3.2006. He pointed out that the demand in respect of civil works for BSNL in Chandrapur, construction of coal washiery at Ghusgus and the job done for WCL Central Workshop at Tadali has been challenged only on the ground of denial of Notification No.1/2006. The classification has not been challenged by the appellant in their appeal. He argued that the appellant have only challenged denial of abatement for this contracts. 2.7. He further argued that the specialized track made for RTO has to be considered as road. The vehicle testing can only be done on record. 3. Ld. AR relied on the impugned order. 4. We have gone through the rival submissions, we find that the impugned order denies benefit of Notification No. 1/06 in respect of services where material was included in the provisions of service. In respect of these contracts, Ld. Counsel has argued that these are in the nature of works contract and can be taxed only from the introduction of works contract service and not prior to that. Countering this Ld.AR has argued that this defense has not been raised in the grounds of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f library building constructed for PWD, Nagpur. It is not clear as to how the Commissioner has reached the conclusion when the said hall is used for shopping purpose especially when the appellants have submitted a certificate from the Municipal Council that the said Hall is used for non commercial purposes. It is seen that in this regard the order of Commissioner is not a speaking order as it gives no finding in respect of Multipurpose Hall and Library building constructed for PWD, Nagpur. The certificate issue by Sub Divisional Engineer, Public Works Sub-Division, Umred reads as follows: Subject: Service tax Notice for the work of Construction of multipurpose hall and library for the Dr. Babasaheb Ambedkar Backward class boys hostel at Umred, Dist. Nagpur. Ref:- Agreement No. B1/08/DL of 2009-10 dated 25.05.2009 Letter No. DVP/NGP/PWD/2013/dated 15.04.2013 This is to state that the above constructed multipurpose hall and library building is not for sale/commercial use by public and/or private or any other entity and are constructed only for the use of boys residing in backward class boys hostel not for others. In view of the clear cut Certificate the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has held that the said track cannot be considered as road because of the following features provided in the said construction - 48. Providing patta on concrete/plastered surface----- 49. Providing an applying two coats of oil bound distemper approved colour and shed to internal plastered new surface----- 50. Providing and applying three coats water proof cement paint of approved manufacturer and of approved colour to new plastered surfaces--- 51. Providing and applying two coats of synthetic enamel paint of approved colour to new structural work and wood work in buildings---------- 52. Providing and fixing ceramic tiles of approved quality 30cm X30cmX5.5.mm for flooring in required position------------ 53. Providing and fixing ceramic tiles of approved quality 30cm X 30cm X5.5mm for flooring in required position--------- Testing track is nothing but a road. It can be described as a specialized road with special features but it is a road nonetheless. The exemption is not to public road only but the exemption is available to all roads. Under these circumstances no tax can be levied on the said tax testing track under the category of commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction of Complex services, the services provided by the appellant is covered by exclusion, which provides that definition of service does not include the complex which is constructed by a person directly engaging any other person for designing or planning of the layout and the construction of such complex. In this case, the Govt. of India provides 80 flats to Income Tax department on rent and therefore, it is excluded from the definition of construction services. He also relies upon the reply given by the Central Board of Customs and Excise to National Building Construction Corporation Limited (NBCC), vide Letter No. F. No. 332/16/2010-TRU., dated 24-5-2010, in support of this contention. On the other hand, learned DR submits that it is not correct to say that service has been provided to Govt. of India directly. He submits that the land is owned by Income Tax department and Income Tax department has requested the CPWD to construct the quarters for them and funds have been made available to CPWD by Ministry of Finance for this purpose. CPWD in reality has acted as a bridge between Income tax department and the contractor and after the residential complex is constructed, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plex. Invariably when two parties are independent entities, there would be an agreement. Absence of any agreement between CPWD and Income tax department also supports the case of the learned advocate. Further, since on behalf of the President of India contractors are entered into, agreements are entered into and bonds are accepted, Govt. of India is treated as Person . Therefore, we are unable to agree with the learned Commissioner when he says that the exclusion clause in the definition cannot be applied to the Govt. of India. For ready reference, definition of Construction of Complex Services is reproduced :- (a) Construction of a new residential complex or a part thereof; or (b) Completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall preparing, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) Repair, alteration, renovation or restoration of, or similar services in relation to, residential complex] The definition of residential complex service has been g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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