2017 (9) TMI 1003 - AT - Service Tax

Valuation - second contract - abatement of value - N/N. 1/06-ST dated 1.3.2006 - The Revenue sought to deny concession as claimed by the appellant on the ground that the gross value on the full taxable service has not been considered by the appellant while arriving at the abatement - Held that - It is the claim of the appellant that they have all documentary evidence in support of their claim that such sale has in fact been done by them in pursuance of the second contract - there is no finding by the Original Authority on this aspect. The appellant are aggrieved - the Original Authority directed to re-examine the issue for a clear finding on the eligibility of the appellant for the benefit under N/N. 12/2003-ST. CENVAT credit - duty paying documents - denial on the ground that the input service did not mention PAN based registration number, which makes the document as ineligible to support the credit - Held that - Though the appellants only pleaded that the eligibility of the credit cannot be denied on this ground as the fact of payment of service tax is not in dispute, we find this aspect also can be verified by the Original Authority. The fact of discharge of service tax by the appellant should be verified for invoking discretion under Rule 9 based on evidences submitted by the appellant. Appeal allowed by way of remand.

Summary

Issues:
1. Eligibility of the appellant to pay service tax under abated value in terms of Notification no.1/06-ST for the second contract.
2. Denial of cenvat credit due to the provider of input service not mentioning PAN based registration number.

Analysis:

Issue 1:
The appeal challenges the denial of abatement under Notification no.1/06-ST for the second contract, focusing on the inclusion of plant and machinery values in the gross amount charged. The Original Authority found that the abatement was not available due to the exclusion of plant and machinery values. However, the appellant claimed exemption under Notification no.12/2003-ST, which allows exemption of material values during service provision. The Tribunal noted the lack of a clear finding by the Original Authority on the eligibility of the appellant for the exemption under Notification no.12/2003-ST. The appellant asserted having documentary evidence supporting the sale of materials, urging a re-examination by the Original Authority. The Tribunal directed the Original Authority to provide a clear finding on the eligibility of the appellant for the benefit under Notification no.12/2003-ST.

Issue 2:
The second issue revolves around the denial of cenvat credit due to irregular documents lacking PAN based registration numbers. The Original Authority upheld the denial based on this ground. The appellant argued that the invoices clearly showed the service tax registration number alongside the PAN number, ensuring proper discharge of service tax and justified credit taking. The Tribunal acknowledged the need for verification of the documents and the actual discharge of service tax by the appellant. It directed the Original Authority to verify the fact of service tax discharge and consider the evidence submitted by the appellant before making a decision on the cenvat credit eligibility.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the Original Authority for a fresh decision, emphasizing that the appellant should be given a fair opportunity to present their case.