2013 (9) TMI 949 - AT - Service Tax

Valuation - abatement - Department viewed that the services provided by them was in the nature of finishing services falling under one of the clauses of section 65 (25b) defining commercial or industrial construction - abatement under Notification No.15/2004-ST as amended by Notf No.1/2006-ST was not available for finishing services and therefore service tax should have been paid on the entire value of the consideration received instead of on 15% of it Held that - The focus has been more or less on legal issues rather than on facts - the whole of the materials used in executing impugned contracts may not be consumables and there may be materials like plywood which are sold and thereafter work like portioning was done. - there is scope for claiming abatement towards value of materials. However, the appellant has not been forthcoming in producing records showing actual value of such goods and the nature of goods by which a proper estimate of the taxable value can be arrived at. - stay granted partly.

Summary

Issues:
1. Correction of cause title in appeal application.
2. Dispute over taxable value of services provided.
3. Eligibility for abatement under Notification No.15/2004-ST.
4. Pre-deposit requirement for admission of appeal.

Issue 1: Correction of cause title in appeal application
The Department filed an application to correct the cause title of the appeal, changing it from "Commissioner of Central Excise, Chennai IV Commissionerate" to "Commissioner of Service Tax, Chennai." The Tribunal allowed the correction, directing the Registry to make the necessary changes, and instructed the appellant to use the correct cause title in further proceedings.

Issue 2: Dispute over taxable value of services provided
The appellant, engaged in works contracts involving partitioning and paneling in commercial or industrial buildings, paid service tax on 15% of the contract value, considering it as the value of services. The Revenue contended that the entire contract value should be taxable, as the services provided were classified as "finishing services" falling under commercial or industrial construction. A show-cause notice was issued, resulting in the confirmation of service tax, interest, and penalties. The appellant argued that the value of materials used should be excluded, relying on specific provisions and previous decisions. The Tribunal found that the appellant failed to provide sufficient evidence to support their claims, leading to a pre-deposit requirement for admission of the appeal.

Issue 3: Eligibility for abatement under Notification No.15/2004-ST
The appellant claimed that they should exclude the value of materials used according to Notification No. 12/2003-ST, but the Revenue argued that most materials were consumables and not eligible for abatement. The Tribunal noted that the appellant did not adequately demonstrate the actual value of goods used, leading to a pre-deposit requirement for the appeal's admission.

Issue 4: Pre-deposit requirement for admission of appeal
Considering the arguments presented, the Tribunal ordered a pre-deposit of Rs.7,50,000 for admission of the appeal within six weeks, with the balance dues waived upon compliance. This decision was made due to the lack of sufficient evidence provided by the appellant regarding the value of materials used in the works contracts.

This judgment highlights the importance of providing concrete evidence to support claims in tax disputes and the significance of complying with procedural requirements for appeal admission in tax matters.