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TMI Blog2019 (7) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... ojects Phase-I" at Ambalamugal. The agreement of the work was executed on 27.03.2004. It was a composite contract which included design, engineering, procurement, supply, fabrication, erection, modification of existing incinerator, refractory works, pre OT. commissioning, commissioning, performance guarantee run and guaranteeing of reduction furnace etc. The value of the work originally included was an amount of US Dollars, $574576.94 and Indian money Rs. 13423682.30. The foreign company had assigned a portion of the work namely, supply including procurement service of the equipment/materials, construction, fabrication, erection, installation including consumables and other items of equipments etc. as per the schedule, to M/s. Zeeco India Private Ltd., who is the assessee herein (hereinafter referred to as 'the assessee company'). Subsequently there occurred modification of the original contract in which the payment in foreign money was reduced to $ 465803 and the payment of Indian money was enhanced to Rs. 18174925.00. The assignment of a portion of the work in favour of the assessee company was admittedly with the concurrence of M/s.KRL. 3. The assessing authority had r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity found that if such goods were purchased by M/s.KRL from outside the State on paying tax applicable in the respective States and handed over to the contractor for execution of the work, no tax could be leviable on the transfer value of such goods. But the argument raised by the assessee company that the purchase bills were drawn in the name of the awarder was not accepted, by observing that M/s.KRL had not even paid the entry tax applicable with respect to such purchases. On assuming that the awarder is denying ownership of the goods before incorporating the same in the execution of the works contract, it was held that the purchases were made by the contractor and the contractor had taken delivery of the goods. Based on finding that there occurred a transfer of property in goods either as goods or in some other form in the execution of the work in question and that a transfer of goods occurred within the State, it was held that the turn over in this respect is chargable to tax. The first appellate authority had confirmed the said portion of assessment on the finding that the appropriation of goods in the work within the State is liable to local sales tax. It was found that the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the order of the first appellate authority, the said issue was not considered. In the second appeal, the Tribunal had allowed the claim of the assessee Company finding that the claim for input tax against the out put tax for the returned period cannot be denied, when it is supported by valid evidence. Therefore the Assessing Authority was directed to give credit with respect to the input tax paid by the assessee company. 8. In the present revision petition the challenge raised by the State is against the findings of the Tribunal in granting exemption with respect to the turn over involved in the import of equipments from the foreign country, by accepting that the transaction will fall under Section 5(2) of the CST Act. The revision petitioner has also challenged the finding of the tribunal to the extent it reversed estimation of turn over made on the basis of Rule 9(2A) (a) of the KVAT Rules. The credit of input tax allowed by the tribunal is also assailed in this revision petition. 9. Despite service of notice the respondent in this revision petition has not chosen to enter appearance or to contest the matter. Therefore the revision petition is disposed of on the basis of ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econsider the above aspects and to arrive at a clear finding on the said aspect. 11. Regarding sustainability of the return based on estimation of turnover relying on Rule 9 (2A)(a), it was contended that, the Tribunal went highly erred in holding that the Rule in question is not applicable. Learned Government Pleader had drawn our attention to the provisions contained in Rule 9 which existed prior to the amendment effected through SRO 385/2007, dated 24.04.2007. In Rule 9(1) the total turnover of a dealer engaged in works contract is stipulated as the contract amount received or receivable. Under subrule (2) of Rule 9, in clause (b) it is provided that, in relation to a works contract in which the transfer of property in goods had taken place not in the form of goods, but in some other form, the value of such goods at the time of incorporation into the work shall be considered as total turnover. Under sub-rule (2A)(a) of Section 9, it is provided that, for the purpose of computing the turnover as provided under sub-rule (2)(b), the value of the goods transferred in execution of the works contract shall not be less than the purchase value and shall include the incidental char ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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