9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 1255 - AT - Service TaxValuation of services - maintenance and repair charges - maintenance and repair services of Heavy Earth Moving Machinery (HEMM), which also entail supply of spare parts in respect of HEMM - extended period of limitation. It is alleged that the appellant has arbitrarily split the gross amount of the agreement towards spare parts and supply of service and that the appellant had inflated the value of spare parts charges and included the value of onsite management services in the value of spare parts and thus evaded payment of service tax. HELD THAT - On similar facts the demand of service was was confirmed by the revenue on another assessee namely M/S. GAINWELL COMMOSALES PRIVATE LIMITED (FORMERLY M/S. TIL LIMITED) VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, RANCHI. 2023 (6) TMI 1308 - CESTAT KOLKATA and in that case, this Tribunal has examined the issue and observed that But, in the case in hand, value of material supplied has already been ascertained and VAT has been paid thereon, in that circumstances, we hold that for the period post 01.07.2002, the taxable value is to be determined in terms of Rule 2A(i)(c) of the Valuation Rules, 2006, therefore in view of the above, this issue is also answered in favour of the Appellant. In this case, it is an admitted fact that appellant has paid VAT on the spare parts supplied by the appellant. In that circumstances, the value of goods supplied is ascertainable as appellant has paid VAT thereon. Therefore, the said amount on which VAT has been discharged by the appellant is to be excluded from the value of the total contract to ascertain the value of taxable service provided by the appellant and the appellant has paid service by excluding the value of spare parts supplied by them. The differential demand of service tax is not sustainable in the light of the decision in the case of Gainwell Commosales Private Limited - Appeal allowed.
Issues Involved:
1. Liability to pay Service Tax on the differential amount of consideration and actual value of spare parts for the period prior to 01.07.2012. 2. Applicability of Rule 2A(i)(c) or Rule 2A(ii) of the Service Tax Valuation Rules, 2006. 3. Invocation of the extended period of limitation. 4. Imposition of penalty on the appellant. Summary: 1. Liability to Pay Service Tax on Differential Amount: The Tribunal found that the maintenance and repair contracts between the appellant and TISCO were composite contracts involving both supply of goods and services, termed as 'works contract.' Such contracts were taxable under 'works contract services' from 01.06.2007 as per the Supreme Court's decision in Commissioner v. Larsen & Toubro Ltd. The Tribunal held that prior to 01.06.2007, such activities were not liable to Service Tax. For the period post 01.06.2007, similar issues had been addressed in Xerox India Ltd., where it was held that maintenance and repair services provided along with materials should be classified under 'works contract service' and not taxable prior to 01.06.2007. Consequently, the demand for the period prior to 01.07.2012 was set aside. 2. Applicability of Rule 2A(i)(c) or Rule 2A(ii): Rule 2A of the Service Tax (Determination of Value) Rules, 2006 was examined. The Tribunal noted that if the actual value of goods supplied is ascertainable and VAT has been paid, the same should be excluded from the total value of the works contract to determine the taxable value of the service. In this case, since the appellant paid VAT on the spare parts, the value of goods supplied was ascertainable. Therefore, the taxable value should be determined as per Rule 2A(i)(c), excluding the value of the goods supplied. This issue was answered in favor of the appellant. 3. Invocation of Extended Period of Limitation: The Tribunal held that since the case involved interpretation of the provisions of the Service Tax (Determination of Value) Rules, 2006 and classification of services, the extended period of limitation was not invocable. This issue was also answered in favor of the appellant. 4. Imposition of Penalty: Given the facts and circumstances of the case, the Tribunal concluded that no penalty was imposable on the appellant. This issue was resolved in favor of the appellant. Conclusion: The Tribunal set aside the impugned orders, holding that the differential demand of service tax was not sustainable, and allowed the appeal with consequential relief, if any. The operative part of the order was pronounced in the open court.
|
