TMI Blog2019 (1) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The contract awarded to appellant is a composite one involving construction, erection, commissioning and installation of plant equipment, structure, instrumental, electrical, etc.,; it is nobody s case that services rendered under contract can be bifurcated activity wise for the tax implication; Revenue Authorities as well as the appellants were unanimous in their submissions that the entirety of the contract is to be taken as a single indivisible contract and taxability thereof or otherwise should be decided. In terms of contract, appellant was to construct a gas processing plant with certain alloyed facilities called as OT - The appellant was also to undertake the construction of certain common and infrastructure facility such as helipad; hanger; ATF refuelling facility; Radio room, portable water treatment system, permanent facilities like canteen building, office building, first aid centre; security control room; swipe and control access system; permanent warehouses; administrative buildings; accommodation buildings; health centre; construction of road; widening of road; construction of flyover as also construction of civil works for comprehensive protected water supply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered can be derived from details of the man hours spent for each activity along with the cost of such manpower. This aspect needs consideration to determine the essential character of the service rendered under the composite contract on the aforesaid basis. Extended period of limitation - Held that:- We are not examining this plea as the same would be relevant only if on remand the adjudicating authority comes to a conclusion that the services rendered were taxable under the head of CICS - the issue left open for determination by the adjudicating authority. Appeal allowed by way of remand. - ST/314/2009, ST/351/2009, ST/1937/2010, ST/25875/2013, ST/30275/2016 - A/30023-30027/2019 - Dated:- 7-1-2019 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) Shri V. Sridharan Shri G. Prahlad, Advocates for the Appellant. Shri P.R.V. Ramanan, Special Consultant for the Respondent. ORDER Per: M.V. Ravindran This appeal is directed against Order-in-Original No. 06/2009 (ST) dated 20.01.2009. 2. The relevant facts that arise for consideration, after filtering out unnecessary details are appellants herein were awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The appellants mi-declared taxable services under the head exempted Services in ST-3 Returns. 2. The appellants have not disclosed the exemption notification for availing such exemption. 3. The appellants have knowingly camouflaged the value received from OT project along with host of other projects for which they have claimed exemption. 4. The appellants have not sought any opinion from the department on the taxability of the present transaction. 5. The appellants did not disclose the activity undertaken by them at the OT in reply to letter dated 21.2.2007. 6. The audit conducted in October 2007 was a routine affair. A.2 In this regard, the appellants submit as follows: Bonafide Belief that the said service does not come under the purview of Commercial or Industrial Construction service A.3 Firstly, the extended period is not invokable as there was no suppression of facts with intent to evade payment of service tax. The appellants were under a bonafide belief that the said service does not come under the purview of Commercial or Industrial Construction service. This belief is strengthened by the decision of the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Upon perusal of the appeal paper book and particularly the order under appeal, we are unable to agree. The Tribunal must perform its duty as a last fact finding authority is indeed an unassailable legal proposition. However, it has performed it or otherwise would depend on the facts and circumstances of each case and we must find out whether in this case the Tribunal has failed in its duty expected from it to be performed in law. It is not fair to read only one paragraph of the order under appeal or by picking out some sentences therefrom. To read the order in appeal in such a manner and consider the finding in isolation would be unjust and unfair. The Commissioner (Appeals) in this case held that the assessee was expected to perform certain duty and that is of full disclosure of facts. In the present case, the assessee was visited with a show cause notice of 9th December, 2005. That followed a show cause notice of 9th September, 2003, which was issued in the normal period of one year and duly adjudicated by an order dated 27th February, 2004. The second show cause notice, invoking the larger period (December, 2002 to March, 2003) alleged suppression and misdeclaration by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was provide to M/s Simplex Industries by their charter. Further, the said opinion also accepts the fact that it is transport terminal however, they applied the principle of noscitur a sociis to held that infrastructure alone will be covered. Firstly, it is not an opinion obtained by the appellants. RIL had obtained opinion from their consultants. In any case, the opinion obtained from charter accountant was in contradiction with the Circular issued in 2005, which provided that roads constructed in private complex were also exempt from service tax. WITHOUT PREJUDICE TO ANY OF THE ABOVE SUBMISSIONS, THE APPELLANTS ARE ENTITLED TO THE BENEFIT OF NOTIFICATION NO. 1/2006-ST DATED 1.3.2006 B.1 Without prejudice to the above submission, in case the demand is confirmed then the benefit of abatement Notification 1/2006-ST dated 1.3.2006 must be extended to the appellants. B.2 Relevant part of the Notification No. 1/2006-ST dated 1.3.2006 is reproduced as under: Effective rate of service tax for specified services- Percentage of abatements In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filled all the conditions of the Notification No. 1/2006-ST dated 1.3.2006. The same are explained in the ensuing paras. i) The services provided by the appellants are classified as Commercial or Industrial Construction Service by department themselves. ii) The services provided by the appellants are not merely completion and finishing services. iii) From 1.4.2006, the appellants are maintaining separate books of account and have not availed or utilized any CENVAT so far used in Commercial or Industrial Construction Service . There is no dispute from department on the fact that the appellants are not entitled for the benefit of above Notification 1/2006. iv) As per the contract, it is a cost-plus contract, whatever cost is incurred by the appellants, the invoice is raised by them on RIL along with mark-up. The contract is service contract, however many of the items such helmet, staging materials, electricity, water, etc. which are used in rendition of output service is being provided by the appellants as well. v) The appellants have not taken any CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling CENVAT credit in respect of another contract. In other words, there is no stipulation in the Notification that the option to avail/non-avail CENVAT credit has to be exercised uniformly in respect of all the contracts executed by the assessee. It is for the assessee to choose which formulation he wants to follow in a given contract. B.6 There is no condition in the Notification No. 1/2006 ST dated 1.3.2006 which remotely even suggests that the benefit of the Notification shall be applied only in the cases wherein the contract in question is a composite contract of supply of material as well as the supply of services. In fact, this was the argument by the department before Hon ble Supreme Court in CST Vs. Bhayana Builders (P) Ltd., [2018-TIOL-66-SC-ST], that the abatement is given to utilize the cost of material used in such transactions and the free supply of material is also liable to be included. Negating the contention of the revenue, the Hon ble Apex Court held that the above argument of the department is not supported by any material. B.7 Accordingly, the value of free material supplied by the service receiver is not included in value of taxable service for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % of the gross amount. Secondly, the language itself demolishes the argument of the Learned Counsel for the Revenue as it says 33% of the gross amount charged from any person by such commercial concern for providing the said taxable service . According to these notifications, service tax is to be calculated on a value which is 33% of the gross amount that is charged from the service recipient. Obviously, no amount is charged (and it could not be) by the service provider in respect of goods or materials which are supplied by the service recipient. It also makes it clear that valuation of gross amount has a causal connection with the amount that is charged by the service provider as that becomes the element of taxable service . Thirdly, even when the explanation was added vide notification dated March 1, 2005, it only explained that the gross amount charged shall include the value of goods and materials supplied or provided or used by the provider of construction service. Thus, though it took care of the value of goods and materials supplied by the service provider/assessee by including value of such goods and materials for the purpose of arriving at gross amount charged, it did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. In such a case, there is an obvious possibility that the credit chain might snap. Hence, the legislation had prescribed a straight jacket formula that in such cases the service provider shall pay service tax on the amount of 25% of the value subject to the condition that no CENVAT credit is taken. B.10 Similarly, in the construction industry also work is done through various subcontractors, and the construction industry is also unorganized and subcontractors also do not maintain proper records. In such a case, the service tax paid by the sub-contractor forms part of the cost of the subcontractor which results in distortion of the credit scheme. To take care of such a situation Notification No. 1/2006 ST dated 1.3.2006 had been issued extending the abatement scheme to construction service provider. Payment on the 33% of the total value under Notification No. 1/2006 ST dated 1.3.2006 is coupled with the condition of non-availment of CENVAT credit. After introduction of Notification 1/2006, the appellants are maintaining separate books of account and have not availed or utilized any CENVAT so far used in Commercial or Industrial Construction Service . Some credit taken in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract as it does not involve any transfer of property in goods, it is not Erection, Commissioning or Installation Services as it has not been rendered by a commissioning and installation agency. C.3 The activity undertaken by the appellants in the present matter is a turnkey contract comprising of engineering, erection, installation, commissioning, electrical, mechanical, instrumental, construction, etc. There is no justification or allegation as to how the department has reached a conclusion that the construction is the predominant activity in the transaction. C.4 Otherwise also, from the wording of Section 65A (b) of the Finance Act, 1994, it can be inferred that it is applicable only in the cases wherein two or more taxable services are involved. Reliance is placed upon Cox Kings India Ltd., Vs. CST, 2014 (35) STR 817 (T) (page 91-103 of the compilation). The relevant portion is reproduced as under: (iii) In our considered view, the provisions of Section 65A have no direct application . This provision provides a guide to the classification of taxable services, where in any circumstances, a taxable service is, prima facie classifiable under two or mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is (i) used, or to be used, primarily for; or (ii) occupied, or to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams;] [Emphasis supplied] D.2 Section 65(25b) of the Finance Act, includes only those construction services that are rendered for construction of a new building , civil structure , pipeline or conduit . D.3 The present activity undertaken by the appellants is not construction of a building . D.4 The word building is defined in various dictionaries as follows: 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in relation to Plant is covered under the category of Erection, Installation and Commissioning Service and not under Commercial or Industrial Construction services . Hence, the activity undertaken by the appellants does not fall within the definition of Commercial or Industrial Construction services . THE PRESENT ACTIVITY IN DISPUTE IS A COMPOSITE CONTRACT COMPRISING OF ENGINEERING ERECTION, INSTALLATION AND COMMISSIONING, MECHANICAL, INSTRUMENTAL, CONSTRUCTION, ETC. UNLIKE WORKS CONTRACT SERVICE, WHERE TRUNKEY PROJECTS INVOLVING ENGINEERING, PROCUREMENT AND CONSTRUCTION OR COMMISSIONING IS ENUMERATED AS A TAXABLE SERVICE, IN ANY OF THE OTHER HEAD SUCH COMPOSITE ACTIVITY IS NOT SOUGHT TO BE TAXED. FURTHER, VIVISECTION OF THE CONSTRUCTION ACTIVITY IS ALSO NOT POSSIBLE IN ABSENCE OF ANY MACHINERY PROVISION. E.1 As per the averments made in the show cause notice, there is no doubt as to the fact that the present activity undertaken by the appellants is a composite service contract. The activity undertaken by the appellants in the present matter is a turnkey contract comprising of engineering, erection, installation, commissioning, electrical, mechanical, instrum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services is not sustainable. Reference can be made to CCE, Kerala Vs. Larsen Toubro Ltd., 2015 (39) STR 913 (SC) (page 69-88 of the compilation). 35. The aforesaid finding is in fact contrary to a long line of decisions which have held that where there is no machinery for assessment, the law being vague, it would [not] be open to the assessing authority to arbitrarily assess to tax the subject. Various judgments of this Court have been referred to in the following passages from Heinz India (P) Ltd. v. State of U.P., (2012) 5 SCC 443. THE APPELLANTS ARE NOT LIABLE BE SERVICE TAX UNDER COMMERCIAL OR INDUSTRIAL CONSTRUCTION SERVICE AS THE ONSHORE TERMINAL IS NOTHING BUT A TRANSPORT TERMINAL FOR TRANSPORTATION OF GAS THROUGH PIPELINES. F.2 Section 65(25b) of the Finance Act, as referred supra. F.3 Section 65(105)(zzq) defines the taxable service in relation to commercial or industrial construction service as under: to any person, by a commercial concern, in relation to commercial or industrial construction service . F.4 Section 65(25b) of the Finance Act, 1994 excludes services provided in respect of roads, airports, railways, tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central India Spinning, Weaving Manufacturing Co. Ltd., Vs. Municipal Committee, Wardha Air 1958 SC 341 (page 144-154 of the compilation) has observed the meaning of terminal in page 347 as under: The word terminal could refer either to the terminal of the goods or the termini of the Municipality. It is clear that the word terminal refers not to the destination or origin of the goods but to the terminal of the Municipal limits. Terminal means end, boundary; situated at or forming the end or extremity of something; situated at the end of a line of railways; forming or belonging to a railway terminus. F.9 The Supreme Court in the case of Man Mohan Tuli Vs. Municipal Corporation of Delhi (1981) 2 SCC 467 (page 133-143 of the compilation) has held that Terminal in connection with transportation means inter alia the fixed beginning or ending point of a given run . F.10 Thus, the term transport terminal is associated with a storage unit or junction on a transportation line where raw materials are store for example, similar to the present case, a transport terminal on an oil or gas transportation line. Transportation through pipeline is a well-kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hore terminal from flooding are services provided in the course of construction of a transport terminal . On-shore Terminal is not Processing Centre F.16 The said onshore terminal is meant for transportation of gas through cross country pipelines. The gas when extracted from the offshore wells would be treated with MEG (Methanol) so as to avoid formation of ice when transported from the terminal through underwater pipelines. Water and unwanted particles, if any present in the gas, would be removed with the help of appropriate facilities installed at the onshore terminal. At present, there are no facilities at the offshore or onshore terminal for removal of Sulphur, Hydrogen Sulphide other impurities from the offshore gas. Since the offshore gas is about 99% pure, such a requirement is not envisaged. Hence, the gas is found in its purest form and does not require any treatment or storage at the Onshore terminal. F.17 Assuming whilst denying that the onshore terminal is considered as a gas processing plant, there is not dispute about the fact that the said facility would be used for transportation of gas through long distance pipelines after processing. Once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notteboom (page 43-50 of the Volume-I of the Compilation) b. Illustrated Glossary for Transportation Statistics 4th Edition (page 66 of the Volume-I of the Compilation) c. Chapter 2:Transporting oil and gas in Northwest Russia http:/ftp2.bentley.com/dist/collateral/docs/press/terminal-pumsnatural- gas-through-longest-subsea-pipelkine_dew-journal.pdf (page 79 of the Volume-I of the Compilation) 4. Water Treatment Plant analogy is incorrect. Unlike in the Water Treatment Plant, wherein treatment of the water is done, no such treatment is done on oil/gas at the Onshore Terminal . In any case, the statement that a Water Treatment Plant is not a terminal is based on assumptions. F.20 In view of the above, the rational given in the said decision is not goods in law. THE EXCLUSION IN NO MANNER SPECIFIES THAT IT WOULD APPLY ONLY TO GOVERNMENTAL OR PUBLIC WORKS G.1 The means clause covers only commercial constructions and hence the exclusion of roads, airports, railways, transport terminals, bridges, tunnels and dams should necessarily be commercial roads , commercial airports , commercial railways , commercial transport terminals , comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of driveway cannot be equated with the construction of road in as much as such driveway was not for public utility purpose but the same was in connection with the petrol pump owned by the owner. In this connection we find that the Board s Circular No. B1/6/2005-TRU dated 27-7-05 is to the effect that - if the contract for construction of commercial complex is a single contract and the construction of road is not recognized as a separate activity as per the contract, then the service tax would be leviable on the gross amount charged for construction including the value of construction of road . As such it becomes clear that the value of construction of road is to be included in the value of the service only when there is no segregation between the construction of commercial complex and construction of the road. If the contract recognizes the two activities as separate activities, even though the construction of the road is in connection with the commercial complex, the benefit has to be allowed. As such the fact whether the road is being constructed for public utility purpose or as a part of a commercial complex is not relevant, in terms of the Board s Circular above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roads, airports, railways, transport terminals, bridges, tunnels and dams are specifically excluded from the scope of levy . H.5 it is clear from the above circular of the Board, that the Board and the Department itself has understood/ visualized these only as infrastructure projects. H.6 The above Para issued in the context of the Works contract service would apply in all fours to their case. This is because both under the definition of Commercial or Industrial Construction service as well as works contract service , exclusion is available to roads, airports, railways, transport terminals, bridges, tunnels and dams. H.7 In view above, the onshore terminal being constructed by RIL being an infrastructure project, the services rendered by the Appellant is not liable to tax. THE INFRASTRUCTURAL FACILITIES ARE ANCILLARY AND IN RELATION TO THE ONSHORE TERMINAL I.1 Apart from construction of the onshore gas terminal, the Appellants are also required to undertake certain civil works/construction for Rural Water Supply (RWS) Scheme at Gadimoga Village. I.2 The activities referred to in clauses (a) to (d) in the above definition of commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction service as defined under the Finance act, 1994. COMMISSIONER, HYDERABAD-II DID NOT HAVE JURISDICTION TO DEMAND SERVICE TAX ON THE SERICES RENDERED IN KAKINADA J.1 Rule 3 of Service Tax Rules, 1994 provide that the Central Board of Excise and Customs may appoint such Central Excise Officers as it thinks fir for exercising the powers under Chapter V of the Finance Act within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise Officer shall exercise his powers. Vide CBEC Notification 14/2002-CE(NT), the jurisdiction of Hyderabad II Commissionerate has been specified as within the district of Hyderabad. Therefore, according to the said notification, Hyderabad II Commissionerate has no jurisdiction over Kakinada, a port located on the Godavari river near Bay of Bengal. In this regard, we rely on the following decisions: 1. M.S. Engineeers India Pvt. Ltd., Vs CCE, 2014-TIOL-269- CESTAT-DEL (Page 391-394 of the Compilation) 2. Vihar Aahar Pvt. Ltd., Vs. CST, 2013-TIOL-534-CESTAT-AHM (Page 395-396 of the Compilation) 3. CCE Vs. Integral Construction Company- 2010 (17) STR 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax for the purpose of modifying the service tax demand. In support of this reliance is placed on the following: 1. CCE, Patna Vs. Advantage Media Consultant reported at 2008 (10) STR 449 (Tri-Kolkata) maintained by Supreme Court reported at 2009 (14) STR J49 (SC) (Page 406-407 of the Compilation) 2. CCE Vs Maruti Udyog Limited reported in 2002 (49) RLT 1 (SC) Q. Hence, the appeal of the assessee may kindly be allowed and the appeal of the Revenue be dismissed. 4. Learned Special Counsel for the Revenue submits that the responsible person in the appellant s office had clearly stated that they have not informed the Department and not paying the service tax on the RIL project that figures related to RIL project were shown under the columns in ST-3 returns. He would submits that Hyderabad office which records the account of RIL project at Kakinada and as all records are maintained in Hyderabad hence the jurisdiction of Hyderabad Commissionerate cannot be called in question. He would submit that the argument of the Senior Counsel, OT constructed by L T is a transport terminal and hence excluded from the purview of commercial or industrial construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 i.e. after the signing of the contract. (iv) Legal opinion of Shri K. Vaitheeswaran dated 23/10/2006 also clearly indicates that he was of the view that activities within the OT were significant and services in relation to the construction of OT could be a matter of dispute. Shri. Purushottam has pointed out this observation and observed that it was not correct to say that the said opinion endorsed RIL s view. (v) What is pertinent for raising a ST demand is the relevant date as defined in section 73(6) of Finance Act, 1994 and not acquiring knowledge of activities as laid down in the Judgment in the case of Neminath Fabrics by the Gujarat High Court. (vi) By its letter dated 21/2/2007 Sudt. C Ex., Kakinada had only sought the details of various sub-contractors. Further, he was not the officer with whom L T were registered and were filing ST-3 returns. (vii) It is an admitted fact [vide the statement of Shri K. Udayabhaskar dated 1/4/2008-Answer to Question No. 17] that L T had not declared to the jurisdictional officer about the OT project and their claiming of duty waiver on the ground that the OT was a transport terminal . The contract was purportedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re than one service. It was a combination of different services such as, civil construction, laying of pipes, erection, commissioning and installation of equipments. (iii) Since L T is essentially an engineering organization and is better placed to judge which of the activities predominate over others, in terms of work content (i.e. man hours spent) as well as cost the department has accepted the view and practice of classification adopted by them. Essential character and predominance have been regarded for this purpose as synonymous with each other. (iv) There is no authority to say that if certain activity falls in the excluded category provisions of section 65 A(2)(b) is not applicable. Such exclusions do not vitiate the nature of the contract being composite. 6. Point No. 5: Activity undertaken is not construction of a new building or civil structure or pipeline. Submissions: (i) A perusal of the detailed scope of work indicates that the activity of construction of OT involved construction of several buildings and civil structures including foundations and civil structures required for erection and installation of equipments. Pipes have also been l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) L T cannot claim bonafide belief as a defence since they were aware that the OT constructed for RIL was in fact a manufacturing facility. They were fully aware of the ST liability for the services rendered to RIL but deliberately did not discharge the liability at the instance of RIL. (iii) L T willfully mis-declared the taxable services under the head exempted services in the ST-3 services. By indicating the relevant notification as 1/2006 they misled the department to believe that they were discharging tax on 33% of the value of the total project cost. (iv) There was deliberate default on the part of L T; hence, penal provisions are clearly attracted. (v) Interest liability is similarly attracted as the tax demand is correct and legally justified. 10. Point No. 9: Department s Appeal is liable to be dismissed. Submissions: (i) In terms of clause 8 A (f) of the contract, ST has been taken to be inapplicable and such tax if found applicable later would be paid by RIL. From this provision it emerges that ST was independent of and over and above the contract amount. Given the above facts the amount received by L T under the contract c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and control access system; permanent warehouses; administrative buildings; accommodation buildings; health centre; construction of road; widening of road; construction of flyover as also construction of civil works for comprehensive protected water supply. 9. At the threshold the appellant has submitted that since some of the activities to be undertaken such as those relating to construction of road, widening of road, construction of flyover as also construction of water supply system are undisputedly non-taxable there was no mechanism prescribed in the law for taxing such a composite contract involving both taxable (assuming construction of Onshore terminal was not a transport terminal) and non-taxable services. It has been submitted that in the absence of there being a mechanism prescribed under the Finance Act for taxing such contracts, involving both taxable and non-taxable services the entirety of the contract could not be exigible to tax. We are unable to agree with this rather novel proposition urged on behalf of the appellant. The submission of the appellant that the Act does not prescribe a mechanism for taking such composite contracts is not correct as, in our view p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arification issued pursuant to the Finance Bill 2004-05 being introduced explaining the scope and ambit of Erection services which was added to the head of Commissioning and Installation services. The relevant extract of the clarification is reproduced here for ease of reference. 14. Extension of service tax on installation and commissioning, to erection services: Service tax was levied on commissioning and installation of plant, machinery and equipment w.e.f. 1-7-2003. The general practice is that erection, commissioning and installation are contracted as a composite package. There have been a number of doubts and queries regarding the distinction between erection and commissioning/installation. Erection would refer to the civil works to installation /commissioning of a plant or machinery. In this year s budget, the scope of service tax under installation and commissioning is being extended to include erection also. Erection involves civil works, which would otherwise fall under the category of construction services. However, in case of a composite contract for erection, commissioning and installation, the erection charges would be taxed as part of this category of ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Insofar as appeal No. ST/30275/2016 is concerned, the demand has been confirmed under the head WCS. This demand is unsustainable, as admittedly the contract awarded to appellant, is a pure service contract and does not involve any transfer of property in the goods involved in the execution of the contract, which is a prerequisite for taxing any service under the head WCS. The fact that the contract is a pure service contract not involving any transfer of property in the goods involved in the execution of the contract is evident from para 10.1 of the show cause notice dated 31.07.2008, which states that since the contract awarded by RIL did not involve any transfer of property in the goods involved in the execution of the contract such activities fell outside scope of WCS. 15. The appellant has contended before us that even if the services rendered by it are held to be taxable under the head of CICS, even then no tax would be leviable, since what has been constructed was a transport terminal. The definition of CICS excludes transport terminal from the definition of the taxing entry. The Revenue on the other hand relied upon the judgement of the co-ordinate bench in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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