2018 (8) TMI 629 – RAJASTHAN HIGH COURT – TMI – Works Contract Service – Construction of building or civil structure services – Commercial Building or not – Exemption to the “Turnkey Projects” – 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?
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Held that:- The hostel which was constructed was a girls hostel and hospital which was need of the Jaipur was constructed. In that view of the matter, it was not commercial building as per the language used and the activities neither fall under commercial activities nor industrial activities, it is purely a social activity where the girls hostel is constructed for girls students in city of Surat and hospital
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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 various types of civil construction works on contract basis, being allotted by the State & Central Government departments, undertakings and bodies like Central Public Works Department, Military Engineer Service, Space Application Centre, National Building Construction Corporation of India and some Private companies, at different locations in the states of Rajasthan and Gujarat. The said Service provider had been registered with Service Tax department under the Commercial construction service provider had been registered with Service Tax department under the Commercial construction service and Works contract service category, having Service Tax Registration No.AAACJ3635PST001 and paying Service Tax on the Construction work carried out them for the private companies. 3.1 An intelligence was received by the Directorate General ofCentral Excise I
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s P. Ltd. is engaged in construction of buildings and civil structures and that apart from him, Shri Ashish Ramesh Agarwal, Shri Prashant Omprakash Agarwal and Shri C.K. Agarwal are the other directors of the company. A statement of Shri Ramesh Chandra Agarwal, the Director of M/s Jatan Constructions P. Ltd. was recorded on 18.7.2011, under Section 14 of Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, wherein, he stated tht he is supervising the activities of the Company and the work related to taxation matter 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 wor
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found that: (1) the civil construction work carried out by the assessee for M/s NBCC, on completion of the entire work, the building or premises constructed by them, was handed over to M/s NBCC and the property was thus transferred, which fulfills the main condition of any service to qualify for being covered under the definition of works contract service; (2) the above two civil construction works have been allotted back to back to the assessee through the Engineering Procurement and Construction, i.e. EPC mode; therefore, the second condition of the definition of the works contract was also fulfilled; (3) the assessee, vide their letter dated16.7.2012, submitted details of payment received from NBCC for the above two projects and on going through the details of payments, it was found that the VAT on works contract is included in the total amount of the cheque which meets the basic condition no.1 of works contract service; (4) the assessee had used their own equipment, resources, man
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. Explanation.- For the purposes of this sub-clause, 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 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 fin
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carried out the abovementioned works allotted to them under the two contracts in the time period from 2008-09 to 2011-12, after issuance of Letter of awards to them by M\s NBCC. During the course of search conducted at the premises of M/s Jatan Constuction P. Ltd. on 18.07.2011, it was found that M/s Jatan Constructions P. Ltd., had not paid the applicable amount of Service Tax on the taxable value received by them from M/s NBCC, in respect of the above two civil construction works. Therefore, M/s Jatan Construction P. Ltd. was required to pay Service Tax on the payments received by them for the two works carried out by them at Surat and Jaipur, for M/s NBCC. 17.1 I have carefully gone through the caserecords, including defense reply and submissions made during personal hearings. The issues before me to decide is (I) whether assessee is sub contractor of M/s. National Building Construction Corporation Ltd. (NBCC) (II) whether construction activity of P.G. Hostel at SVNIT Surat and ESI
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it.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 . In this letter the contract was for construction of P.G. Hostel at SVNIT, Surat. The cost of the said project was revised vide letter dated 12.3.2010. Similar letter No. NBCC/GM-RBG (E&I) ESIC/J
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service & it exclusively falls under 65(105)(zzq) i.e. construction service. Since the projects, pertained to hospital and hostel, belonging to government department, the same are neither commercial nor industrial, but are for general public utility and charitable in nature. Therefore, they are exempted from levy of service tax. I find that criteria to classify the service under any specific category will depend upon the terms and conditions of the contract dated 15.1.2009 and 3.3.2009 wherein it is specifically mentioned that with reference to your tender for the above mentioned work, we are pleased to accept your tender for the amount, worked out on the basis of rates quoted by you on the Bill of Quantities of the tender documents on terms and conditions referred. It is also requested to mobilize immediately your site personnel plant and equipments and other resources so that work can be started as per schedule. I find that nature of contract, their terms and conditions, the run
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wise. 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 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 a part thereof; or (d) Completion and finishing services, repair, alteration, renovation or restoration or, or similar services, in relation of (d) and (e) above; or (e) Turnkey projects including engineering, procurement and construction or commissioning (EPC) projects. 4. He contended that the Tribunal has seriously committed an error in taking a view inspite of the decision of Banglore Tribunal in Ramky Infrastructure Ltd. vs
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, according to the counsel for the appellants, any service provided in relation to "dams" and "irrigation" should be deemed to have been excluded from the purview of "works contract service" as well. There is no warrant for deeming so inasmuch as every taxable entry needs to be understood with reference to the language used in such entry and, accordingly, a given service has to be classified, which is the mandate of subsection (1) of Section 65A of the Finance Act, 1994. We have not found anything in the text of the definition of "works contract" to indicate that turnkey/EPC projects for irrigation are excluded from the ambit of taxable service of works contract With regard to "dams", we have already expressed our views in para (10.6) of this order. As rightly submitted by the learned 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
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However, in our considered opinion, the Tribunal clearly observed as under: 7. Admittedly, in the present case the construction activity of the appellant is with reference to student s hostel and the public hospital. These are non-commercial buildings. Accordingly, these are excluded from tax liability under works contract service. 6. It is thus clear that the hostel which was constructed was a girls hostel and hospital which was need of the Jaipur was constructed. In that view of the matter, it was not commercial building as per the language used and the activities neither fall under commercial activities nor industrial activities, it is purely a social activity where the girls hostel is constructed for girls students in city of Surat and hospital in Jaipur. 7. Thus, we are in complete agreement with the view taken by the Tribunal. No substantial question of law arises in the appeal. 8. The appeal stands dismissed. – Case laws – Decisions – Judgements – Orders – Tax Management India
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