2017 (11) TMI 398 - AT - Service Tax

Benefit of N/N. 12/2003-S.T., dated 20-6-2003 - taxability of value of the goods and materials sold by the service provider to the recipient of service - Held that - The appellant has pointed out that there has been study of the data based on which it was concluded that for their service contracts the percentage value of the goods and material is 50% - further, there has not been any substantial reasons and evidences to counter the contents of the documentary proof submitted in terms of the N/N. 12/2003-S.T. giving necessary abatement benefit to the appellant - appellant is entitled to the benefit of notification - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against Commissioner (Appeals) Order confirming service tax demand, interest, and penalties.
2. Claiming benefit under Notification No. 12/2003-S.T. for abatement of service tax on goods and materials.
3. Disagreement on documentation submitted by the appellant for claiming benefit.
4. Assessment of documentary proof and submissions by both parties.

Analysis:
1. The appellant, Sharp Business System Ltd., appealed against the Commissioner (Appeals) Order confirming a service tax demand of ?29,66,980/- along with interest and penalties, including an additional penalty of ?5,000/- under Section 77 of the Finance Act, 1994. The liability was reduced to ?27,17,330/- by the Commissioner (Appeals) through cum-tax duty benefit.

2. The appellant sought the benefit of Notification No. 12/2003-S.T., dated 20-6-2003, which allows abatement of service tax on goods and materials. The appellant claimed that they are liable to pay service tax only on the service portion of the contract with the client, not on the value of goods and materials sold. However, the Revenue disagreed with the documentation provided by the appellant, mainly in the form of a Chartered Accountant certificate.

3. The appellant, represented by Advocate Shri Rachit Jain, and the Revenue, represented by Shri Ranjan Khanna, presented their arguments. The Revenue sustained the demand of service tax against the appellant due to disagreement with the documentation submitted.

4. Upon review of the facts and submissions, the Tribunal found that the appellant had submitted documentary proof, including a Chartered Accountant Certificate, indicating that the service tax was correctly discharged. The Tribunal noted that the appellant had provided sufficient evidence, and there were no substantial reasons or evidence to counter the contents of the documentation submitted under Notification No. 12/2003-S.T. Consequently, the Tribunal held that the appellant was entitled to the benefit of the notification, allowing the appeal with consequential benefits to the appellant.