2017 (3) TMI 176 - AT - Service Tax

Valuation of taxable services - deduction of cost of material as 80% based on contract - Denial of exemption - Notification 12/2003-ST dated 20.06.2003 - The only ground on which the present appeal is preferred by Revenue is that sufficient documentary evidences were not produced in support of the claim of exemption under notification 12/2003-ST, by the Respondent - Held that - Tribunal in Gogia Brothers 2017 (1) TMI 163-CESTAT New Delhi and Raj Engineering 2016-TIOL-3359-CESTAT-DeI., where the Tribunal allowed the said exemption on almost similar set of facts - Appeal dismissed.

Summary

Issues involved:
1. Eligibility for exemption under Notification 12/2003-ST for taxable services provided by the respondent.
2. Sufficiency of documentary evidence to support the claim of exemption.

Analysis:

Issue 1: Eligibility for exemption under Notification 12/2003-ST
The case revolved around the respondent's claim for exemption under Notification 12/2003-ST for providing taxable services related to management, maintenance, and repair to various Government bodies. The notification exempted the value of taxable service equal to goods and materials sold by the service provider to the service recipient, subject to the condition of providing documentary proof. The original authority and the Commissioner (Appeals) both upheld the respondent's entitlement for the exemption after reviewing the contract, invoices, and financial records. The Tribunal noted that the lower authorities had correctly concluded that the condition stipulated in the notification had been fulfilled by the respondent, making them eligible for the exemption. The Tribunal referred to previous decisions where similar exemptions were allowed based on factual findings, supporting the respondent's claim.

Issue 2: Sufficiency of documentary evidence
The Revenue contended that the respondent had not produced sufficient documentary evidence to support their claim for exemption under Notification 12/2003-ST. The Revenue argued that the lower authorities had granted the concession based on an arbitrary percentage without proper support from invoices or other documentation. However, the respondent's counsel countered by stating that their contract clearly specified that 80% of the value was for the sale of various items, and they had paid VAT for the value exceeding 80%. The respondent's balance sheet, contract, and invoices were presented as evidence to demonstrate compliance with the notification's conditions. The Tribunal found that the lower authorities had conducted a factual analysis of the evidence provided by the respondent and concluded that the exemption was justified. The Tribunal dismissed the Revenue's appeal, emphasizing that there was no serious error in the lower authorities' factual findings and referencing previous Tribunal decisions that supported similar exemptions based on comparable facts.

In conclusion, the Tribunal upheld the respondent's eligibility for the exemption under Notification 12/2003-ST, emphasizing the importance of factual findings and documentary evidence in determining tax liabilities. The appeal by the Revenue was dismissed, highlighting the significance of compliance with notification conditions and the need for substantial evidence to support claims for exemptions in tax matters.