The Appellant computed the amount of the taxable value of services under the contract at Rs.7,51,79,175/- and the amount of Cenvatable Service Tax at Rs.25,30,531/-. The note appended specified that the owner shall reimburse service tax against the production of cenvatable documentary evidence. The contention of the Appellant before the arbitral tribunal was that the amount of Rs.25,30,531/- did not constitute a ceiling. The Appellant has by a letter dated 11 January 2006, which was after the acceptance of contract dated 26 November 2005 stated that there was a calculation mistake in specifying the Cenvatable Service Tax at Rs.25,30,531/- whereas it should be corrected to be Rs.76.68 lacs (calculated at 10.2% of the taxable value of service). The sole arbitrator noted in the award that in the original bid document the Appellant had quoted the Cenvatable Service Tax of Rs.25.30,531/- (which was 33% of 10.2% of the taxable service quoted of Rs.7.51 Crores). The award held that the condition of the contract that Cenvatable Service Tax will be paid on actuals had to be read in conjunction with the SP2 form; for, if the entirety of the service tax was to be reimbursed on actuals, then there was no reason to mention the amount in the bid. Hence, the arbitrator held that it was not open to the Appellant to unilaterally alter the purchase order and even assuming that the Appellant had committed a mistake, it was not entitled to claim in excess of what was stipulated in the contract.
