TMI Blog2018 (8) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... rat and hospital in Jaipur. These are excluded from tax liability under works contract service - appeal dismissed - decided against Revenue. - D.B. Central/excise Appeal No. 136/2018 - - - Dated:- 20-7-2018 - MR. KALPESH SATYENDRA JHAVERI AND MR. INDERJEET SINGH JJ. For Appellant(s) : Mr. Siddharth Ranka For Respondent(s) : None Judgment 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal filed by the assessee-respondent herein and set aside the order passed by CIT (A) as well as the original authority. 2. Counsel for the appellant has framed the following substantial question of law: (i) Whether the ld. CESTAT was right in law in extending the benefit of exemption to the Turnkey Projects which is available to the construction of building or civil structure services covered under clause (ii)(b) of Works Contract service, but is not available to Turnkey Projects covered under clause (ii)(e) of Works Contract service, as both these services are entirely different? 3. The facts of the case are that the assessee is engaged mainly in the business of providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter is being looked after by shri Prashant Agarwal, the other Director of their company. He further submitted that from 2006-07 onwards, the following two work contracts have been received by their company from M/s National Building Construction Corporation of India Ltd. i.e. NBCC (hereinafter referred to as NBCC): a. Construction of new civil and allied works for Post-Graduate Girls Hostel at Sardar Vallabhbhai National Institute of Technology Surat. The work was started in the month of February 2009 and the value of work executed is ₹ 5177.00lacs. (i.e. ₹ 51.77 crores). b. Construction/modernization of 300 beded Hospital at ESIC, Jaipur. This work was started in year June 2009 and is under execution. The value of the work contracts is ₹ 7500.00 lacs (i.e. ₹ 75 Crores. 3.3 The counsel for the appellant has contended in the light of averments made in memo of appeal which reads as under: 6. That the show cause notice dated 10.09.2012 was adjudicated by the ld. Commissioner, Central Excise Commissionerate, Jaipur II, i.e., the ld. Adjudicating Authority, after considering the totality of facts and circumstances of the case, evidence available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a contract wherein,- (I) transfer of property in goods involved in the execution of such contract is leviable to tax 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, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or apart thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; 3.5 Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ojects. The investigating team observed that two projects being constructed on behalf of NBCC i.e. construction of P.G. Hostel at SVNIT Surat and ESIC Hospital at Jaipur, are liable for payment of service tax. Accordingly SCN dated 10.9.2012 for demand of service tax of ₹ 5,45,77,175/- was issued by ADG O/O the DGCEI Zonal Unit, Ahemdabad. 17.3 Now I proceed to decide the case on merit.First of all I take up the issue of whether the assessee is sub-contractor of NBCC or net. Reliance is placed on letter No. NBCC/AGM/LOA/2009/1208 dated 15.1.2009, written by M/s NBCC to the assessee, wherein cost of the project, period of construction and other terms and conditions of the agreement were mentioned. The assessee was directed to furnish bank guarantee, insurance coverage and obtaining statutory licenses. The letter written by Sh. A.K. Gupta AGM of NBCC, specifically mentioned that This letter of award shall form part of the contract agreement. This letter of award is being issued in duplicate. The duplicate copy is to be signed and stamped by the authorized signatory of your company and is to be returned to this office in token of your confirmation and acceptance in full . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the activity undertaken by them fall under works contract service. I draw my inferences from the definition of service given under section 65(105) (zzzza) of the Finance Act 1994 for works contract which reads as to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. 17.6 Explanation- For the purpose of this subclause, works contract means a contract wherein (I) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for 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, lift and escalator, fire escape staircases or elevators; or (b) Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Special Consultant for the Department, there is no room for any intendment or assumption or presumption and, where the words of the statute are plain and clear, there is no room for applying any of the principles of interpretation. In this context, the reliance placed by the Special Consultant on the decision of the Apex Court in Grasim Industries case is found to be apposite. 10.13 Clause (e) of the definition of works-contract--turnkey projects including engineering, procurement and construction or commissioning (EPC) projects--clearly conveys the legislative intent underlying the definition of works contract in relation to turnkey projects. It does not exclude EPC projects for irrigation, nor does it discriminate between EPC projects for commercial/industrial purposes and those for non-commercial/non-industrial purposes, nor between EPC projects of Government departments/agencies and private entities. What does not figure in the plain language of the entry cannot be read into it by this Tribunal. 4.1 He contended that the judgment which has been sought to be relied upon is subject matter of SLP before the Supreme Court. 5. However, in our considered opinion, ..... 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