9911796707
TMI Blog2012 (4) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... setting up of power plants at various sites which involved supply of goods as well as supply of services. The appellant were availing abatement of 67% of the total contract value and paying service tax only on 33% of the contract value in terms of notification no. 15/2004-ST dated 10.09.2004 in respect of some contracts. The said abatement was subject to the condition that Cenvat credit of duty paid on inputs or capital goods for providing such taxable service is not taken under the provisions of CENVAT Credit Rules, 2004. Notification no. 15/2004-ST dated 10.09.2004 was replaced by Notification no. 1/2006-ST dated 01.03.2006. The said notification also provided abatement to the extent of 67% subject to the condition that CENVAT credit of duty on inputs or capital goods, or CENVAT credit on input service used for providing such taxable services is not taken under the provisions of CENVAT Credit Rules, 2004. 2.1.1 Scrutiny of the records of the appellant revealed that for the year 2005-06 (October, 2005 onwards), 2006-07 and 2007-08, the appellant had taken CENVAT credit on inputs or input services in respect of some contracts, and, therefore, it appeared that they were not eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the period October 2008 to March 2009 and April 2009 to September 2009. In this case also, scrutiny of the records of the assessee revealed that they had availed CENVAT credit in respect of inputs/input services and also claimed abatement as per the provisions of Notification no. 15/2004-ST, thereby violating the conditions prescribed therein. Show cause notices dated 19.05.2010 and 11.08.2010 were issued and the same were adjudicated by the learned Commissioner vide order dated 29.10.2010 wherein he confirmed the service tax demand of Rs.2,18,75,565/- along with interest thereon and also imposed penalties under sections 76, 77 and 78 of the Finance Act, 1994. 2.4 Hence the appellant are before us. 3. The learned consultant for the appellant makes the following submissions:- 3.1 The appellant executes industrial/commercial constructions to various clients under different contracts. In respect of certain contracts, they have not availed CENVAT credit on inputs (prior to 01.03.2006) and CENVAT credit on inputs and input services (on or after 01.03.2006). In respect of such contracts they have availed abatement of 67% as provided for in notifications no. 15/2004 dated 10.09.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y paid on inputs and service tax paid on input services utilized in providing the output taxable service in respect of the aforesaid two projects only. In the ST-3 returns filed by them, they had disclosed the full details, invoice-wise and project-wise, and, therefore, they have complied with the terms and conditions of the notifications and hence the demands are not sustainable in law. Merely because, in respect of certain contracts they had availed input/input service tax credit in respect of which they have not availed any abatement and discharged service tax liability on the full value of the contract, they cannot be denied the benefit of abatement in respect of other contracts wherein they had not availed input tax credit prior to 01.03.2006 and input/input service tax credit after 01.03.2006 as the notification nowhere stipulates that the condition relating to non-availment of CENVAT credit should be satisfied in all cases uniformly. He also submits that the entire facts were known to the department at the relevant time as seen from the correspondence exchanged between the appellant and the department, the details of which are given below: i. Department's letter dated 09.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is equivalent to thirty-three per cent. of the gross amount charged from any person by such commercial concern for providing the said taxable service: Provided that this exemption shall not apply in such cases where - (i) the credit of duty paid on inputs or capital goods has been taken under the provisions of the Cenvat Credit Rules, 2004; or (ii) the commercial concern has availed the benefit under the notification of the Government of India, in the Ministry of Finance, (Department of Revenue) No. 12/2003-Service Tax, dated the 20th June, 2003 [G.S.R. 503 (E), dated the 20th June, 2003]. NOTIFICATION NO 1/2006-Service Tax, Dated: March, 1, 2006. G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of the description specified in column (3) of the Table below and specified in the relevant sub-clauses of clause (105) of section 65 of the Finance Act, specified in the corresponding entry in column (2) of the said Table, from so m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-availment of CENVAT credit should be satisfied uniformly without exception. Therefore, in respect of a contract where the assessee has not taken input credit prior to 01.03.2006 and input/input service tax credit on or after 01.03.2006, the assessee would be rightly entitled for the benefit under the notification no. 15/2004-ST as replaced by notification no. 1/2006 dated 01.03.2006. In a case where the assessee avails CENVAT credit, then in such cases the assessee is not entitled for abatement and the service tax liability will have to be discharged on the full value of the contract. There is nothing in these notifications which prevents an assessee from not availing CENVAT credit and paying service tax on 100% of the contract value in respect of one particular contract and availing abatement and not availing CENVAT credit in respect of another contract. In other words, there is no stipulation in the notification that the option to avail/non-avail CENVAT credit has to be exercised uniformly in respect of all the contracts executed by the assessee. It is for the assessee to choose which formulation he wants to follow in a given contract. 4.3 As regards the issue whether cen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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