IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL EASTERN ZONAL BENCH : KOLKATA REGIONAL BENCH – COURT NO. 1 Service Tax Appeal No. 79752 of 2018 (Arising out of Order-in-Appeal No.278-279/SKS/BOL/ST/2018-19 dated 23.04.2018 passed by Commissioner of Central Excise & Service Tax, Bolpur Commissionerate) M/s Steel Authority of India Ltd. : Appellant IISCO Steel Plant, Burnpur Works, Burnpur, District-Burdwan, West Bengal-713 325.

VERSUS Commissioner of Central Excise & Service Tax, : Respondent Bolpur Commissionerate, Sian, Bolpur, Birbhum-731 204.

APPEARANCE:

Shri Rahul Tangri & Ms. Ekta Jhunjhunwala, Advocates for the Appellant Shri P.Das, Authorized Representative for the Respondent CORAM:

HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)

HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO. 77211/ 2025 DATE OF HEARING :22.07.2025 DATE OF DECISION:22.07.2025 Order : [Per Shri Ashok Jindal]

The appellant is in appeal against the impugned order.

2. The facts of the case are as under:

A. M/s. Steel Authority of India Limited, IISCO Steel Plant is a 'Maharatna' category public sector undertaking falling under the administrative control of the Ministry of Steel, Government of India. The Appellant is engaged in the manufacture of excisable goods falling under Chapters 72 and 73 of the First Schedule to the Central Excise Tariff Act, 1985 and is duly registered with the Central Excise Department for payment of central excise duty. The Appellant is also registered with the Service Tax Department for discharging its service tax liability, including on a reverse charge basis.

B. The Appellant entered into a tripartite contract dated 10.05.2006 with (i) M/s. SBW Electro Mechanics Import Export Corporation, China (hereinafter referred to as „SBW China‟), and (ii) M/s. TLT Engineering India Pvt. Ltd. Such contract was entered into for the purpose of design, engineering, supply, erection, installation, testing, commissioning, and demonstration of performance guarantee parameters for a new Turbo Blower Condenser and its associated facilities at ISP, Burnpur.

C. The said contract was a clearly divisible contract which separately identified the scope and value of services to be performed and goods to be supplied. The Price Schedule agreed with SBW China is tabulated below, for ease of reference:

Sl. No. Item description Price (USD)

1.0 Design & Engineering 1,15,000

2.0 Supply of Plant & Equipment (FOB 14,28,000 China Port basis)

3.0 Supply of Commissioning spares 1,05,000 (FOB China Port basis)

4.0 Foreign supervision charges in 1,50,000 India during Erection, Start-up, Commissioning, Training at site &

PG Tests Total Contract Price (Imported 17,98,000 Portion)

D. From the Price Schedule agreed with SBW China, as extracted above, it is evident that the value of goods and services has been specifically bifurcated in the contract and the value of service elements, namely design & engineering and foreign supervision charges cumulatively amounted to USD 2,65,000.

E. Out of the said amount agreed between the Appellant and SBW China, USD 1,71,000 (equivalent to Rs. 77,77,652/-)was invoiced upto August 2007 (four invoices)on which applicable service tax of Rs. 9,60,997/-was duly discharged under the taxable category of “Consulting Engineering Services” on reverse charge basis.

F. Against the aforesaid backdrop, a Show Cause Notice dated 11.01.2011 bearing No. 07/ADC/ST/BOL/11 was issued by the Department alleging that the services rendered by SBW China are classifiable under “Erection, Commissioning or Installation Services” as defined under Section 65(39a) of the Finance Act, 1994 (hereinafter referred to as „the Finance Act’) and is accordingly taxable under Section 65(105)(zzd). It was further alleged that the value of taxable service is determinable at 33% of the contract value after allowing an abatement of 67% in terms of Notification No. 01/2006 – ST dated 01.03.2006. Accordingly, a demand of Rs. 26,43,489/- was raised on the Appellant on payment