Whether
a composite contract for ‘Manufacture,
Supply and Installation of Lifts in a Building’ amounts to ‘Contract of
Sale’ or ‘Works Contract’?
It was held that it amounts to ‘Contract of Sale’ and not a ‘Works Contract’ as skill and labour employed for converting main components into end product was only incidental. Thus, the decision of the Supreme Court in ‘State of AP Vs Kone Elevators’ [2005] [181 ELT 156] was overruled by the 5 member bench of the Supreme Court in ‘Kone Elevator India Pvt Ltd Vs State of Tamilnadu’ [2014] [34 STR 641] [SC].
It was held that it amounts to ‘Contract of Sale’ and not a ‘Works Contract’ as skill and labour employed for converting main components into end product was only incidental. Thus, the decision of the Supreme Court in ‘State of AP Vs Kone Elevators’ [2005] [181 ELT 156] was overruled by the 5 member bench of the Supreme Court in ‘Kone Elevator India Pvt Ltd Vs State of Tamilnadu’ [2014] [34 STR 641] [SC].
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