Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Dept. Can’t Classify Product as Zarda Scented Tobacco After Repeatedly Approving It As Chewing Tobacco: CESTAT *  Mere Uploading Of GST Order On Portal Is Not “Valid” Service: Tripura HC *  CGST Can Proceed Even If SGST Closed Similar Case Earlier: Delhi HC *  SC upholds 28% GST on online gaming with retrospective effect. *  West Bengal Govt cuts E-way Bill Threshold limit to Rs. 50,000 for intra-state goods movement. *  Criminal Prosecution Under Central Excise Act Can’t Continue After CESTAT Sets Aside Duty Demand on Merits: Punjab & Haryana High Court. *  Madras High Court Quashes GST Assessment Orders for Denial of Personal Hearing; Remands Matter Subject to 10% Deposit *  Ex Parte GST Order: Madras High Court Directs Immediate Removal of Bank/ITC Attachment Upon 25% Deposit *  J.K. Cement Receives GST Demand Order of Rs 8,02,113/- from Ahmedabad Tax Authority *  Delhi Police EOW Busts Alleged Rs. 128 Crore GST Fake Invoice Network. *  REPLY TO SCN CAN’T BE TREATED AS “EMPTY FORMALITY”: ORISSA HIGH COURT QUASHES GST DEMAND OF RS. 57.30 LAKH *  Challenge to CGST Provisions restricting ITC to Bonafide Purchasers : Allahabad HC issues notice *  CBIC Notifies Revised Customs Tariff Values for Edible Oils, Gold, Silver, Brass Scrap and Areca Nuts *  Delhi HC Orders Removal of GST Attachment After Statutory 1 Year Period Expired *  GSTAT Extends Relaxed Appeal Filing Guidelines till December 31, 2026 *  AO fails to Provide Import - Export Data from DGFT to Taxpayer for Reconciliation *  Gold, Silver Imports To Get Costlier As Govt Raises Customs Duty To 10%  *  GSTAT Enables Pre-Payment Access to Document Upload and Checklist for GST Appeal Filing *  GST Portal Restrictions Can’t Override Statute: Gujarat HC Allows Cross-State Transfer Of CGST ITC After Amalgamation *  Centre Revises HS Codes for Large Diameter Steel Pipes Used in Oil & Gas Pipelines *  Customs Duty Liability Arises On Warehouse Clearance Date: Supreme Court *  Government lifts export ban on de-oiled rice bran *  CESTAT Grants 12% Interest on Pre-Deposit for Investigation from Date of Deposit till Refund and Denies Interest on Interest. *  Government Overhauls GST Classification Framework for Non-Alcoholic Beverages; Fruit Juice Drinks, Milk-Based Beverages and Caffeinated Drinks to Attract Revised 5% and 40% GST Rates from May 1, 2026 *  India’s gross GST collections hit a record Rs 2.42 lakh crore in April, up 8.7% *  Customs clearance stalled, revenue hit over MRP dispute *  Shipping Corporation explores Middle East routes as Hormuz tensions disrupt cargo movement *  India, Kenya signs MoU for exchange of pre-arrival customs information *  No demand of Taxes under Reverse Charge if Tax Already Discharged by Service Provider under forward charge *  The India-New Zealand Free Trade Agreement, signed "once-in-a-generation" deal that eliminates tariffs on 100% of Indian exports to New Zealand
Subject News *  Consignment Sales Can’t Be Reclassified as Inter-State Sales Based on Pre-Agreement Evidence: CESTAT *  Exporter Can’t Be Denied Advance Authorization Benefit Due To ICEGATE Technical Glitch: Delhi High Court *  No GST Demand For Mere Wrong Set-Off Of IGST Credit Under CGST And SGST Heads: Kerala HC. *  Cenvat Credit Can’t Be Denied on Input Services Having Nexus With Manufacturing Activities: CESTAT *  Pending Proceedings Can’t Survive Without Saving Clause: Calcutta High Court Quashes GST Demand of Rs. 6.28 Crore After Omission of Rule 96(10) *  Madras HC Quashes GST Demands on TASMAC (Tamil Nadu State Marketing Corporation) Bar Licence Fee *  GST Proceedings Cannot Survive Omitted Rule Without Saving Clause: Calcutta HC *  Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT *  Businesses Should Not Be Kept Outside GST Regime Without Due Process: Gauhati High Court *  Punjab & Haryana HC Directs Reconsideration of Contractors’ Claim for Additional GST Payment After Tax Rate Hike From 12% to 18% *  S. 108 Statements Can’t Be Sole Basis Without Following Section 138B Procedure: CESTAT *  Bombay High Court Frames Key Questions on Mandatory Distribution of ITC U/s 20 CGST Act *  Filing of Annexure-B for Refund Applications involving Accumulated ITC using the offline utility in GST portal: GSTN *  No Service Tax on Parent Company’s Un-Invoiced Cost Allocations Without Actual Service or Consideration: CESTAT  *  Calcutta High Court Upholds GST Classification of Polypropylene Leno Bags as Plastic Products *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  GSTAT Issues Major Bench Allocation Framework; All Appeals to First Go Before Division Bench *  ITC Blocking Without Reasoned Order Violates Rule 86A; Punjab & Haryana HC Directs Release of Credit *  Allahabad HC Refuses Bail to CGST Superintendent In Rs. 70 Lakh Bribery Case *  S.130 Can’t Be Invoked Without Prior Tax Determination U/s 73/74: Allahabad High Court Quashes GST Confiscation Proceedings *  SC grants Bail to Rs 54cr GST case  *  Karnataka HC Sets Aside Duplicate GST Orders, Orders Fresh Hearing on GSTIN Cancellation *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  Transfer Of Unutilized ITC After Amalgamation - Supreme Court Issues Notice *  PUNJAB & HARYANA HC QUASHES GST CANCELLATION NOTICE FOR FAILURE TO PROVIDE CBIC ENQUIRY REPORT *  LICENSE FEE, TECHNICAL ASSISTANCE CHARGES NOT INCLUDIBLE IN CUSTOMS VALUE UNLESS THEY ARE A CONDITION OF SALE: CESTAT *  DELHI HC ORDERS REMOVAL OF GST ATTACHMENT AFTER STATUTORY 1 YEAR PERIOD EXPIRED *  CUSTOMS BROKER CAN’T BE FAULTED JUST BECAUSE EXPORTER’S GST REGISTRATION WAS PREVIOUSLY CANCELLED: CESTAT   *  Supreme Court Dismisses Review Plea Against Delhi HC Ruling Holding Real Operator Behind Fake GST Firms Liable As ‘Taxable Person  *  GST Appeal Can’t Be Rejected Merely Because DRC-07 Was Not Uploaded On Portal: Bombay High Court  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1544

Classification of service as Works Contract service - issue highly debatable 0 stay granted in similar case - stay granted herein

Case: IVRCL-NAVAYUGA-SEW (JOINT VENTURE) Versus COMMR. OF C. EX., HYDERABAD
 
Citation: - 2012 (25) S.T.R. 236 (Tri.- Bang.)
 
Issue:- Joint venture with State Government of AP – whether works contract service when there was no transfer of property in the goods consumed in the execution of work from the Assessee – matter highly debatable – stay granted and pre-deposit waived as similar pending cases stay was granted.
 
Brief Facts:- Applicants are a joint venture of two or three companies and registered as partnership firm. The work awarded by the government were related to irrigation project and included project investigation, soil exploration, design, supply, installation, testing & commissioning of machinery, construction  of pump house, all civil structure, CM & CD works, etc. The contract awarded by the government to each of the appellants was sub-contracted to one or the other constituent of the partnership of the same joint venture and the latter undertook the works. The Applicants did not pay Service tax.
 
Demands of Service Tax under the head ‘work contract service’ which is taxable w.e.f 1-6-2007 were raised against the Applicants on the amount collected by them from the Government of Andhra Pradesh for execution of certain works awarded by the government under agreement entered between the appellant and the Government.
 
In some cases, the show-cause notices invoked the extended period of limitation for recovery of Service tax for the extended period. These notices also demanded interest on tax apart from proposing penalties under various provision of Finance Act, 1994.
 
In separate orders, the demands were confirmed against the Applicants and penalties were imposed on them.
 
Applicants are therefore in appeal before the Tribunal. Application have been filed seeking waiver of pre-deposit and stay of recovery in respect of various amount of Service tax and penalties determined by the Commissioner in adjudication of various show cause notices for period June, 2007 to September,2008.
                                                                                                                                                                                                                                                                                                                                              
Appellant’s Contentions:- Applicants contended that work in question in each case is public welfare/utility project and hence excluded from the levy of Service tax under the head ‘works contract service’. The second contention of the Applicants is that the work would not constitute works contract in as much as there was no transfer of property in the goods consumed in the execution of work from the Appellant to Government of Andhra Pradesh.
 
In this connections Applicants has heavily relied on Supreme Court’s judgment in State of Andhra Pradesh v. Larsen & Turbo Ltd. [2008-TIOL-158-SC-VAT] wherein the Court had examined the legal position with regards to transfer of property in the goods consumed in execution of the work undertaken by the contractor through the sub contractor. It was held that the property of such good should be considered to have been transferred directly from the sub-contractor to the client. In other words, there was a deemed sale by the sub-contractor to the client. On the strength of this decision of the Supreme Court, Applicants has contended that, in the instant case, it cannot be said that there is transfer of property in the good consumed in the execution of work, from the JVs firm to the Government of Andhra Pradesh.
 
Applicants argued that without passage of property from the JVs to Government, the former cannot be held to be providers of ‘work contract service’. They also referred to some of the specimen work orders in his endeavor to show that the works undertaken as per these order did not constitute works contract for purpose of Section 65(105) (zzzza). Applicants has also claimed support from the Board Circular No. 123/5/2010-TRU, dated 24-5-2010 wherein the definition of ‘work contract’ was clarified. It is argued that, two or more activities should be comprised in works contract, they should severally also be shown to be taxable services. On this test also, according to Applicants, the activity undertaken by the JVs through their sub-contractors would not qualify to be ‘work contract service’.
 
They has also prayed for waiver of pre-deposit and stay of recovery in view of certain Stay orders passed by this Tribunal in similar cases viz. Ramkay Infrastructure ltd. V C.C.E. -2010 (20) S.T.R. 123, Ramkay Infrastructure v. C.C.E.-2011 (22) S.T.R. 85 and Nagarjuna Construction Co. v. C.C.E- 2011(22) S.T.R. 433. It is submitted that on similar set of facts, waiver and stay were granted in those cases.
 
Reasoning of Judgment:- The Tribunal was of the view that the issues raised in this case are highly debatable and that, for the present purpose, the precedent cited by the Counsel can be followed. The Tribunal perused the stay orders cited by applicants and have found that waiver and stay were granted on similar fact in favour of those parties.
 
Prima-facie, the Board’s clarification work’s in favour of the appellant. In this view of the matter, waiver of pre-deposit and stay of recovery are allowed in respect of the amounts adjudged against the appellants.
 
Decision:- Stay granted and pre-deposit waived.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com