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TMI Blog2009 (3) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction of Complex Service (Residential). They were registered with the Service Tax Department. They paid Service Tax after availing abatement of 67 per cent of their gross receipts in terms of Notification No. 15/2004-ST, dated 10-9-2004 in case of Commercial Construction Services and Notification No. 18/2005-ST, dated 7-6-2005 and Notification No. 1/2006-ST, dated 1-3-2006 in case of construction of residential complexes for the period from 1-10-2005 to 31-3-2006. Show-cause notice dated 17-4-2007 was issued to the appellant on the ground that the cost of materials supplied was excluded for purpose of payment of Service Tax and the relevant Notifications viz., No. 15/2004-ST, dated 10-9-2004 and No. 18/2005-ST, dated 7-6-2005 do not provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice category of 'Works Contract' with effect from 1-6-2007 and not 'erection, installation and commissioning' services as contended by the revenue. The ratio of the above decision would squarely apply to the facts of the appellant's case. (iii) The appellants pay Sales Tax. The contract which they inter alia executed are composite and indivisible contract and is a works contract as understood under the Sales Tax law read with article 366(29A) of the Constitution. The indivisible contract which the appellant executed cannot be vivisected for the purpose of levy of service tax as held by the Tribunal in the Daelim Industrial Co. Ltd. v. CCE [2007] 7 STT 184 (New Delhi - CESTAT) maintained by the Supreme Court in 2004 (170) ELT A181 (SC). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomer. As the High Court has interpreted the explanation below the Notification in the above manner, a contrary order is untenable. (ix) The addition of value of the materials supplied by the customer has no legal basis and contrary to the valuation mechanism provided in section 67 of the Act. (x) Referring to the explanation under Notification No. 15/2004-ST, dated 1-3-2005, it was submitted that the said explanation does not call for inclusion of value of materials supplied free of charge by the customer, who is not the provider of construction service but the recipient of construction service. The Notification only requires addition of all goods or materials used, provided or supplied by the service provider and therefore, elastic inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble services had been clarifying that there cannot be any 'double taxation' in cases where the services are rendered by a person through another person to the ultimate consumer, as long as the main person who has the contact with the customer is paying the service tax on the gross amount. Reliance was placed on the following Circulars : (i) TRU Letter F. No. 341/18/2004-TRU (Pt.), dated 17-12-2004 (ii) Circular No. 23/3/97-ST, dated 13-10-1997 (iii) Master Circular No. 96/7/2007-ST, dated 23-8-2007 (xv) The decision of the Commissioner is contrary to Hon'ble Apex Court's decision in the case of Bharat Sanchar Nigam Ltd. (supra) wherein it was held in paras 81 and 85 that State Legislature though have the power to levy sales tax but this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification, the cost of the materials should be included even if they had been supplied by the service receivers. Further, she reiterated the impugned order. 4. We have gone through the records of the case carefully. It is seen that the appellants had registered under the category of 'construction of residential complex' and 'commercial or industrial construction service'. The point at issue in the show-cause notice is with regard to the availment of Notification No. 15/2004 and 18/2005, in terms of which an abatement of 67 per cent on taxable value was claimed and further, the inclusion of the value of the materials supplied by the service recipient. The revenue has interpreted the Explanation to the Notification to mean that the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods supplied and provided by the client cannot be included for calculating the Service Tax. Further, insisting on including the cost of materials supplied by the service receiver will be contrary to section 67 of the Finance Act, according to which, the value of the taxable services shall be the gross amount charged by the service provider for such service. The cost of materials supplied by the service receiver would not be covered in terms of section 67. Moreover the said section provides for exclusion of cost of materials in respect of certain services. Another important legal contention taken by the appellant is that they had been registered under 'Works Contract' provisions for purposes of sales tax. They have produced the cer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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