2018 (8) TMI 1338 - AT - Service Tax

Benefit of N/N. 12/2003-ST dated 20.6.2003 - denial on the ground that the appellant had availed the CENVAT Credit on the inputs utilized for providing taxable output services. Held that - A plain reading of the above notification makes it crystal clear that to avail the benefit of the said notification, the assessee should not avail the credit on the inputs/raw materials used in providing the output services - Even though the appellant in the grounds of appeal, claimed that the value of the components/ parts etc. have been included in the value of taxable services, however, no evidence has been produced in this regard. Benefit cannot be allowed - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against Order-in-Appeal regarding Service Tax exemption under Notification No. 12/2003-ST.

Analysis:
The appeal was filed against Order-in-Appeal No. AV(74)56/2014 dated 19.5.2014 issued by the Commissioner of Central Excise & Service Tax (Appeals), Aurangabad. The appellants provided taxable services under Maintenance or Repair service and Erection, Installation, and Commissioning service during the relevant period. They used various inputs like Part of Boilers, ERW Tubes, Steel Tubes, Pipes, Flanges, etc., for which they availed CENVAT Credit. The appellant also claimed exemption under Notification No. 12/2003-ST dated 20.6.2003. A show-cause notice was issued for non-compliance with the conditions of the notification, leading to a demand for unpaid Service Tax of ?10,48,721. The demand was confirmed with interest and penalty, and the appeal was filed against this order.

The Revenue argued that the appellant could not avail the benefit of the exemption notification as they had not reversed the CENVAT Credit on inputs used for taxable output services. The appellant's claim of including the value of components/equipment in the gross taxable value and discharging Service Tax was not supported by evidence. The Tribunal noted that the appellant had provided Repair & maintenance service and erection, installation, and commissioning services during the relevant period, using components, parts, or raw materials for which they availed credit. The Revenue denied the benefit of the notification as the condition was not satisfied, which required not availing credit on inputs/raw materials used in providing output services.

The relevant Notification No. 12/2003-ST exempted the value of goods and materials sold by the service provider to the recipient of service from Service Tax, subject to specific conditions. The notification required documentary proof indicating the value of the goods and materials, and the appellant failed to provide evidence supporting their claim. As a result, the Tribunal found no discrepancy in the Commissioner (Appeals) order and dismissed the appeal for lack of merit.