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TMI Blog2024 (6) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... ding payment of Service tax on a portion of payment received as transport/ insurance income from M/s PGCIL by way of considering the said payment as proceeds for providing PGCIL services of mere transportation of goods by a person other than GTA which was exempted form payment of Service tax by virtue of entry No. (p) of Section 66D of the Finance Act. Acting upon the said intelligence, investigation was initiated against the Appellant, documents relevant to the said intelligence were called for. After the detail investigation and scrutiny of the documents/ contracts it appeared that at the time of raising invoices/RA Bills, Appellant had not added value of transportation and insurance income in the gross amount charged by them for provisions of Works Contract Service to the recipients including M/s Power Grid Corporation of India Ltd. Instead, appellant had raised separate invoices for transportation and insurance and have not paid any service tax on such charges by claiming that said services fall under the category of services stipulated under the provisions of Section 66D(p) of the Finance Act, 1994. However the said amount has been charged in relation to the works contract.&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, for this reason, the entire proceedings get vitiated. 2.2 He further submits that the Ld. Commissioner also while passing the impugned order had completely overlooked the fact that the services of transportation and/or insurance undertaken by the appellant get completed much before the erection and installation activity starts. In the present case, since the "Service Contract" under consideration involves multiple services, for classification of the same, it needs to be examined whether the individual service in from of "transportation and/or insurance" is merely a component of the overall supply or is itself a distinct and independent supply as per the terms of Section 66F of the Finance Act, 1994. 2.3 He also submits that from the perusal of tender documents, it can be understood that the Appellant, after making ex-factory sale of goods, had also undertaken to arrange transportation and /or insurance services on behalf of Electricity Distribution Authorities (EDA"s). However, the property in goods used to get transferred in name of EDA"s at the Factory of the Appellant only. Further, as regard the "installation service" it has been clearly laid down in the contract t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus the value recovered towards arrangement of "transportation and insurance" service under the "Service Contract" is also sought to be included in the value of the works contract service for the purpose of computation of the liability of service tax. The Cross -fall breach clause cannot be read in isolation but must be read harmoniously with the other clauses contained in the agreement and ensure that none of the clauses in the agreement are invalidated. The finding of the Ld. Commissioner is also contrary to the settled position that the contract must be read as a whole and all clauses must be given effect. Thus, the heavy reliance placed on the cross fall breach clause in isolation to conclude that the contract between the Appellant and the EDAs are a single and indivisible contract is clearly unjustified. Therefore, on this ground the impugned order is liable to be set aside. He placed reliance on the following judgments:- (i) CCE & ST, Ahmedabad Vs. Kalpataru Power Transmission Ltd. - 2021(3)TMI 823. (ii) S.K. Samanta& Co. (P) Ltd. Vs. Commissioner of Service tax, Kolkata -2012(28)STR481(Tri-Kolkata) 2.6 He also argued that the tax leviable in respect of works contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d towards "transportation and/or insurance" charge, the appellant must have been given the benefit of abatement under Rule 2A(iii)(A) of the Service tax (Determination of Value) Rules 2006 and accordingly, value of the service should be equivalent to the forty percent of the total amount charged for the works contract. However, in the impugned order the Ld. Commissioner has not allowed abatement as contemplated in the valuation Rule and confirmed the demand on the total amount of consideration of Rs. 111,62,73,110/- as recorded under the ledger "Sale Outwards Freight". Therefore, the computation of demand itself is erroneous. The tax calculation is also incorrect because the amount received by the appellant from its service receiver is required to be treated as inclusive of the amount of service tax payable. In the case of excise duty also, it has been held that the amount received should be taken as cum-duty and the value should be derived therefrom, by excluding the duty alleged to be payable as required under Section 4(4)(d)(ii) of the Central Excise Act. He placed reliance on the Trade Notice No. 20/2002 dtd. 23.05.2002 and also decisions of Sri Chakra Tyres reported in 1999(10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment cannot allege suppression of facts and invoke the extended period of limitation. Therefore, extended period of limitation cannot be invoked by the department since, there is no suppression of facts present in the Appellant"s case. He placed reliance on the decision of M/s. GD Goenka Pvt. Ltd. Vs. Commissioner of CGST, 2023(8)TMI -995-CESTAT NEW DELHI. 3. Shri Mihir G. Rayka, Ld. Additional Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned orders. 4. We have heard both sides and perused the records. The issue involved in the present case is that whether the transport/insurance charges received by the Appellant is required to be included in the gross value of service of erection and installation of transmission towers Service or otherwise. We have gone the through the contracts and find that under the said Ex-Works Supply Contract appellant had supplied the transmission line tower/tower parts on ex-factory basis from its factory. The said tower/parts and other accessories were cleared from the factory gate of the appellant under the cover of the tax-invoices and property in goods used to get transferred to the customer (M/s PGCIL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing service'. This Tribunal held that the contract may be a composite contract but three services were clearly mentioned separately with separate rates for the same as indicated against each of the service. It was further observed that site formation and cleaning service was brought into tax net w.e.f. 16/06/2005 and GTA service w.e.f. 01/01/2005 from which dates, the appellant was paying service tax. The Tribunal held that there is no justifiable reason to hold that the two services shall form part and parcel of 'cargo handling service'. Accordingly, the appeal was allowed, the said judgement was further carried in appeal before Hon'ble Supreme Court, the Hon'ble Supreme Court upheld the order of this Tribunal reported at 2015 (39) S.T.R. J 370(S.C.). 4.1 We also notice that in the matter of M/s Crompton Greaves Ltd. Vs. Commissioner of Central Excise & Service tax, Bhopal the Tribunal vide final Order No. 51900/2021 dtd. 03.09.2021 also held as under : - "12. Having considered the rival contentions, we find that the impugned order is erroneous and mis-conceived as service tax has been demanded on the apparent gross value, as per contract/agreement, of Rs.25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udits from time to time wherein the details in respect of transportation income has been observed and acknowledged by the officers, from time to time. The responsibility of the assessee is limited to the filing of his returns, which have been regularly filed and the same is not under dispute, and nothing more is required. In this undisputed facts, the department was not prevented from issuance of show cause notice within the normal period. Therefore, we are of the view that in this case, the allegation of suppression of facts and invocation of the extended period of limitation is not correct and legal. Accordingly, the entire demand being beyond the normal period, the same is not sustainable on the ground of time bar also. Our view on time bar is supported by the decision in the case of M/s. GD Goenka Pvt. Ltd. Vs. Commissioner of CGST, 2023(8)TMI -995-CESTAT NEW DELHI which is reproduced below: "11. We have examined these grounds for invoking extended period of limitation. 12. Section 73 provides for recovery of service tax not levied, not paid, short levied, short paid or erroneously refunded. The provisions of this section apply mutatis mutandis to irregularly availed CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and deliberately suppressed the fact that it had availed ineligible CENVAT credit on input services. The position of the appellant was at the time of self-assessment and, during the adjudication proceedings and is before us that it is entitled to the CENVAT credit. Thus, we find that it is a case of difference of opinion between the appellant and the Revenue. The appellant held a different view about the eligibility of CENVAT credit than the Revenue. Naturally, the appellant self-assessed duty and paid service tax as per its view. Such a self-assessment, cannot, by any stretch of imagination, be termed deliberate and wilful suppression of facts. 15. Another reason given in the SCN for invoking extended period of limitation was that the appellant had deposited the disputed amount of service tax during audit but later disputed it which shows the appellant"s intent to wilfully and deliberately suppress the facts. This reasoning of the Revenue cannot be accepted because there is nothing in the law which requires the assessee to accept the views of the audit or of the Revenue. There is nothing in the law by which an inference of intent to evade can be drawn if the assessee does not ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igns the format of the Returns. So long as the assessee files the returns in the formats honestly as per its self assessment, its obligation is discharged. 18. Another ground for invoking extended period of limitation is that the appellant had not sought any clarification from the department. We find that there is neither any provision in the law nor any obligation on the assessee to seek any clarification. It was held by the High Court of Delhi in paragraph 32 of Mahanagar Telephone Nigam Ltd. vs. Union of India & Ors. [2023-TIOL-407-DELHI HIGH COURT ] as follows: " 32. As noted above, the impugned show cause notice discloses that the respondents had faulted MTNL for not approaching the service tax authorities for clarification. The respondents have surmised that this would have been the normal course for any person acting with common prudence. However, it is apparent from the statements of various employees of MTNL that MTNL did not believe that the amount of compensation was chargeable to service tax and therefore, there was no requirement for seeking clarifications. Further, there is no provision in the Act which contemplates any procedure for seeking clarification from jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may deem necessary. Thus, in the scheme of the Finance Act, 1994, the officer has been given wide powers to call for information and has been entrusted the responsibility of making the correct assessment as per his best judgment. If the officer fails to scrutinise the returns and make the best judgment assessment and some tax escapes assessment which is discovered after the normal period of limitation is over, the responsibility for such loss of Revenue rests squarely on the shoulders of the officer. It is incorrect to say that had the audit not been conducted, the allegedly ineligible CENVAT credit would not have come to light. It would have come to light if the central excise officer had discharged his responsibility under section 72. 21. This legal position that the primary responsibility for ensuring that correct amount of service tax is paid rests on the officer even in a regime of self- assessment was clarified by the Central Board of Excise and Customs [CBEC] in its Manual for Scrutiny of Service Tax Returns the relevant portion of which is as follows: 1.2.1 A The importance of scrutiny of returns was also highlighted by Dr. Kelkar in his report on Indirect Taxation [Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would enhance efficiency and release manpower for detailed manual scrutiny, which could then become the core function of the Range/Group. 2) A detailed scrutiny programme also serves a "workload development" function by initiating referrals for audit/anti-evasion. 1.2.2 Authority and Ownership 1.2.2A The authority to conduct scrutiny of returns for verifying the assessment done by the assessee is provided in Rule 5A of the Service Tax Rules, 1994. This rule, interalia, authorizes the Commissioner to empower any officer to carry out "Scrutiny, verification and checks, as may be necessary to safeguard the interest of revenue". The Rule also allows the officer to call for any record maintained by the assessee for accounting of transactions, the trial balance or its equivalent, and the Income Tax Audit Report maintained under Section 44AB of the Income Tax Act. In other words, the Rule permits the officer to examine financial records for scrutinizing the return to determine the correctness of the assessments made. In pursuance of this, the Board has also issued guidelines vide letter F.No.137/27/2007 CX.4, dated 08.02.2007, which makes it mandatory to scrutinize returns on a regu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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