2009 (8) TMI 373 - AT - Service Tax

Commission and installation services- valuation-Notification No. 12/2003 dated 20.06.2003- The assessee had supplied parts and other materials to customers during the course of providing erection, commissioning, and installation services. It excluded parts and materials from the value of taxable service, claiming exemption under notification No. 12/2003,dated 20.06.2003.The commissioner, merely going by figure in the balance sheet, quantified the demand of service tax against the assessee. Held that- impugned order was to be set aside and remand back the matter for fresh decision.

Summary

Issues Involved:
Quantification of service tax liability based on Balance Sheet figures, inclusion of material cost in taxable service value, denial of exemption under Notification No. 12/2003, applicability of longer period of limitation, need for detailed examination of invoices.

Analysis:

1. Quantification of Service Tax Liability:
The appellants argued that the adjudicating Commissioner relied solely on Balance Sheet figures to calculate the service tax demand, without considering the separate cost of materials supplied during service provision. The Tribunal acknowledged the appellants' claim and emphasized the necessity of examining all invoices to determine the actual taxable value accurately.

2. Inclusion of Material Cost in Taxable Service Value:
The appellants contended that the material cost supplied to customers during service provision should not be included in the taxable service value as per Section 67 of the Finance Act, 1994. They highlighted the need to present invoices showing the separate cost of materials. The Tribunal directed the adjudicating authority to assess the applicability of Notification No. 12/2003, dated 20-6-2003, in this context upon reexamination.

3. Denial of Exemption under Notification No. 12/2003:
The appellants' claim for exemption under Notification No. 12/2003 was denied by the adjudicating Commissioner based on limited sample examination. The Tribunal emphasized the importance of reviewing all invoices comprehensively to ascertain the eligibility for exemption accurately.

4. Applicability of Longer Period of Limitation:
The Revenue acknowledged that the longer period of limitation applied due to the appellants' incomplete disclosure of service value bifurcation and partial payment of service tax without revealing the material cost details. The Tribunal agreed with the Revenue's stance and permitted a remand for a fresh adjudication considering the limitation aspect.

5. Detailed Examination of Invoices:
The Tribunal, after considering arguments from both sides and relevant case law, concluded that a detailed examination of invoices was crucial to determine the correct service tax liability, applicability of exemptions, and adherence to limitation provisions. Consequently, the Tribunal set aside the previous order and remanded the case to the adjudicating authority for a comprehensive reevaluation, ensuring the appellants have the opportunity to present all relevant documents, including invoices.

In conclusion, the Tribunal allowed the appeal by remanding the case for a fresh decision, emphasizing the importance of thorough examination of invoices, consideration of exemption provisions, and adherence to limitation rules in determining the service tax liability accurately.