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2024 (5) TMI 768 - AT - Service TaxLiability to pay Service Tax, when Central Excise duty / Sales Tax had been paid on the gross value of the purchase order for crane, including Erection/commissioning charges and transport etc. - Composite contract - decisions not examined because of non-availability of decisions at the time of passing of order - HELD THAT - This is the matter is old and benefit of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT as well as VISHWANATH PROJECTS LIMITED VERSUS COMMISSIONER OF SERVICE TAX, HYDERABAD 2019 (11) TMI 675 - CESTAT HYDERABAD by the appellant was not available to the Appellate Authority. The matter deserves therefore to be remitted back to the Appellate Authority to examine and comment on applicability of various case law which are now available as also the nature of contract and whether same were divisible or composite. Appellant shall be free to advance its arguments and Appellate Authority shall consider the case law (including since the time of settling of position by the Apex Court through L T case and its applicability) as also if contract conditions indicate a composite contract. While considering limitation, it will also consider the arguments, if any, put forth by the appellants. Appeal is allowed by way of remand.
Issues involved:
The liability of the Appellant to pay Service Tax when Excise duty/Sales Tax had been paid on the gross value of the purchase order for cranes, including Erection/commissioning charges and transport. Summary: Issue 1: Liability to pay Service Tax The Appellant, engaged in manufacturing and selling cranes, supplied cranes to customers under purchase orders which included obligations for manufacturing, transport, delivery, erection, and installation at the buyer's premises. The Appellant claimed to have paid Excise duty and sales tax on the total sales value, including erection and commissioning charges. The Revenue demanded Service Tax on the entire sale value of cranes, arguing that erection and commissioning charges were included. The Appellant contended that no additional charges were recovered beyond the invoice value on which Excise duty/sales tax had already been paid. Issue 2: Legal Grounds The Appellant raised various grounds during the appeal, citing case law to support that the goods were supplied. The issue of limitation was also raised due to conflicting case law and legal interpretations. Issue 3: Taxability of Erection Commissioning Services The Revenue argued that Service Tax is chargeable on any taxable service, including the gross amount charged for services like Erection Commissioning of cranes. Reference was made to the L&T decision, highlighting that composite contracts could only be taxed under Works Contract Services from a certain period onwards. Issue 4: Judicial Precedent The Appellant relied on a decision in the matter of VISHWANATH PROJECTS LTD. VS. COMMISSIONER OF SERVICE TAX, HYDRABAD, which emphasized the importance of clear demarcation between material supply and service components in contracts. It was concluded that the contract in question was a composite works contract and could have been taxed under Works Contract Services post a specific date. Conclusion: The Tribunal found that the matter required further examination in light of recent case law and the nature of the contract to determine if it was divisible or composite. The case was remitted back to the Appellate Authority for reevaluation considering the available case law and arguments presented by the Appellant. The appeal was allowed by way of remand.
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