NIRMAN ASSOCIATES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE controversy in this appeal is on the classification of the activity whether shall be "commercial and industrial construction" as defined by Section 65(25b) of the Finance Act, 1994 (hereinafter referred to as "the Act") as claimed by Revenue or shall fall under the category of the activity called 'works contract' as defined by Section 65(105)(zzzza) of the Finance Act, 1994 as claimed by the Appellant in respect of the activity of construction of petrol pumps most particularly civil works done as averred by leaned Authorized Representative (AR). The Adjudication gave rise to service tax demand of Rs. 17,45,337/ - with consequential penalty of equal amount under Section 78 of the Act and penalties under other sections, followed by interest.

(2.) LEARNED AR appearing on behalf of Appellant submits that when there was service tax demand of Rs. 17,45,337/ - in adjudication, that was reduced to Rs. 14,00,000/ - (approximately) at the first appellate stage. Learned appellate authority, considering various aspects of the matter modified the adjudication order to reduce the demand to such an extent and directed for quantification of the demand. The quantification if made in a reasonable manner, the service tax demand may be Rs. 14,00,000/ - approximately.

(3.) THE plank of argument of the learned AR today is that "works contract" was specifically brought to the statute book for taxation from 1 -6 -2007. This entry covers certain scope of work which involves goods and transfer of property of such goods if involved in the course of execution of the contract. Such transfer being amounting to sale of goods and such an activity has come into the fold of levy of service tax under 'works contract', the case of the Appellant involves certain goods in the work carried out for the petroleum companies and comes within the purview of the works contract. Further argument is that construction of a new building or a civil work or a part thereof primarily for the purpose of commerce or industry being included in the definition of works contract under Section 65(105)(zzzza) of the Finance Act, 1994 w.e.f. 1 -6 -2007, similar such activity which was taxable under a different category of service under Section 65(25b) of the Finance Act 1994 shall no more be taxable in terms of such latter entry. What that precisely intended is even such activity shall fall under the scope of "works contract" for taxation. Therefore the consistent view of the Tribunal is that any activity falling under the category of "works contract" shall be exigible to tax from 1 -6 -2007 under the category of "works contract" in terms of entry under Section 65(105)(zzzza) of the Act. To this effect there are also various judgments for which the Appellant deserves to be considered leniently. His further submission is that when the finding of the learned Commissioner (Appeals) is that they have carried out the work like civil contractor, the activity should be considered as "works contract" in the new entry of taxation with effect from 1 -6 -2007 but not prior to that.