9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 129 - AT - Service TaxDetermination of gross amount for service tax under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 - Inclusion of the value of the equipments and materials supplied under Contract No.1 in determining the gross amount for levy of service tax under the Composition Scheme - penalties - HELD THAT - The appellant entered two contracts with WBPDCL for execution of work prior to 07.07.2009, therefore, in terms of CBEC Circular No.150/1/2012-ST dated 08.02.2012, the value of supply of goods contract, which are executed by the appellant and the same were given to the appellants for execution of Contract II, for the contract value, the value of goods supplied under Contract I is not includible for determination of gross value for payment of service tax under composition scheme for the works executed by the appellant under Contract No.(2). The appellant has correctly discharged their service tax liability on gross value of works contract i.e. Contract (2). Penalty - HELD THAT - The proceedings against the appellant are not sustainable. As no proceedings are sustainable, no penalty is imposable on the appellant. The impugned demand set aside - appeal allowed.
Issues Involved:
1. Inclusion of value of goods supplied under Contract No.1 in the taxable value for service tax under Contract No.2. 2. Applicability of CBEC Circular No.150/1/2012-ST dated 08.02.2012. 3. Determination of gross amount for service tax under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. 4. Imposition of penalties on the appellant. Summary: Issue 1: Inclusion of Value of Goods Supplied Under Contract No.1 The appellant, a Government of India Undertaking, entered into two separate agreements with WBPDCL: Contract No.1 for the supply of equipment and materials, and Contract No.2 for services related to erection, testing, and commissioning of the supplied goods. The appellant argued that the value of goods supplied under Contract No.1, on which proper taxes were paid, should not be included in the taxable value of Contract No.2 for service tax purposes. The Tribunal agreed, referencing the case of TRF Limited Vs. Commissioner of Central Excise & Service Tax, Patna & Others, which held that the value of goods in Contract No.1 cannot be included in the taxable value of Contract No.2. Issue 2: Applicability of CBEC Circular No.150/1/2012-ST dated 08.02.2012 The Tribunal noted that the agreements were entered into before 07.07.2009, and the execution of work had commenced before this date. According to CBEC Circular No.150/1/2012-ST dated 08.02.2012, for contracts entered into and executed before 07.07.2009, the value of free-of-cost supplies should not be included in the gross amount for service tax under the composition scheme. The Tribunal found that the appellant's case fell within this provision, thus supporting the appellant's position. Issue 3: Determination of Gross Amount for Service Tax The Tribunal examined the meaning of "gross amount" as per the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. It concluded that for contracts entered into and executed before 07.07.2009, the value of free-of-cost supplies should not be included in the gross amount for service tax purposes. This interpretation was consistent with the CBEC Circular and previous Tribunal decisions, including Essar Projects (India) Limited and Tata Projects Limited. Issue 4: Imposition of Penalties Given that the appellant correctly discharged their service tax liability on the gross value of works contract under Contract No.2, the Tribunal found that the proceedings against the appellant were not sustainable. Consequently, no penalties were imposable on the appellant. The Tribunal set aside the impugned demand and waived the penalties imposed on the appellant. Conclusion: The Tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, concluding that the appellant had correctly discharged their service tax liability and that the proceedings and penalties were not sustainable.
|
