TMI Blog2019 (3) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that entire equipment and material has been supplied in totality by Nortel. Whether for being considered as a composite works contract, the service provider is required to provide not only of the services required for execution of the contract but also all materials and equipments required for such execution? - Held that:- When there is supply of material involved by the service provider in execution of the product project / work contracted to him, the activity done on such service provider cannot be mere “service simplicitor” but will be a composite contract comprising of both materials and services. It really does not matter what percentage of the materials is being provided by such service provider at his cost. However, necessary facts as to whether the appellants had actually supplied material also for the works executed by them is not forthcoming. More so because, the purchase order says “for services only”. It is seen that appellants have rendered ECIS in nature of laying foundation for tower, installation of machinery equipments etc. Though tower, machinery, equipments are provided by Nortel, the contractor would have to use other materials for rendering ECIS. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 dt. 16.09.2008 396-398/ 2010 dt. 30.8.10 14,06,997 2. ST/739/2010 V/ST/30/122/ 07-STU dt. 12.10.2007 06/2006, 07/2006 09/2006 5/2009 dt. 17.06.2009 2,88,356 3. ST/740/2010 V/ST/30/68/2008-STU (SCN) dt. 06.10.2008 09/2007 14/2009 dt. 03.12.2009 19,199 4. ST/463/2011 03/2009-ST dt. 05.10.2009 May 2008 to July 2008 8/2010 (ST) dt. 21.07.2010 209/ 2011 dt. 29.04.11 7,40,014/- Upon adjudication of SCNs as at Sl.No.1 to 3 as above, the adjudicating authority confirmed the demands as proposed in the notices and imposed penalties under Section 76, 77 of the Finance Act, 1994. In appeal, Commissioner (Appeals) vide a common order dt. 30.08.2010 (impugned order) upheld the orders of original authority. Hence Appeal Nos.ST/738 to 740/2010. So also, SCN as at Sl.No.4 was adjudicated which culminated in order dt. 29.04.2011 (impugned order) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not contemplated in charging section and is beyond even the legislative competence of the Parliament. If materials supplied to the service provider has to be added to the contract value and then 67% abatement is to be calculated, it would amount to a service tax levy on 33% of the value of the materials supplied by the client, which is not within the scope of the contract of the contractor and would amount to levy of service tax on a material component as well as on an item which is not even received or enjoyed by the contractor. (v) The appellants further submits that the constitutional bench of the Supreme Court in the case of Commissioner of Central Excise Vs Acer India (2004) 172 ELT 289 examined the definition of transaction value must be read in the text and context thereof and not dehors the same. The Supreme Court held that a machinery provision contained in section 4 and the explanation contained therein by way of definition of transaction value can neither override the charging provision nor by reason thereof a goods which is not excisable would become an excisable one only because one is fitted into the other unless the context otherwise requires. (vi) The Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement to allege that all materials are supplied by Nortel. On a closer reading of relevant para 4.6 (a) only lays down that all materials which are supplied by Nortel would remain the property of Nortel at all times. On the other hand, in para 8 (b) it is specifically indicated that a contractor will be responsible for providing at his own cost of all facilities, tools, equipment, components, raw materials, supplies, software and other items and resources reasonably necessary to perform the Services and complete the work and to perform its related maintenance and support obligations. Contractor will bear all costs associated with its performance hereunder. In no circumstance, will Nortel Networks be liable for such expenses or costs. 5.3 Further perusal of the purchase order and invoices indicates that the appellant s activities are not restricted only as a service provider simplicitor, for example a purchase order / invoice clearly indicate supply and installation of power cables multi strand, Armoured copper UG, Tower implementation, shelter erection on site, supply and installation of earthing pits, supply and installation of aviation lamp for towers and so on. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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