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TMI Blog2014 (9) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the express condition in Notification No. 15/2004-ST as well as Notification No. 1/2006-ST during the relevant period, the completion and finishing services in relation to building or civil structure were not eligible for 67% abatement. In the discussion part of the impugned order the adjudicating authority also discussed the applicability of exemption Notification No. 12/2003-ST dated 20.06.2003 to the appellants which was inter alia subject to the condition that there was a documentary proof specifically indicating the value of the goods and material sold by the service provider to the service recipient . The adjudicating authority observed that there was no segregation between the service & the material component either in the appellants invoices or in the works orders. The value of the material used by them was not separately indicated in the invoices and still the service tax was paid on the 33% of invoice value. The adjudicating authority further held that the mention of gross value in their contracts indicated that there was no separate sale of goods and material by the service provider to service recipients. Thus the adjudicating authority held that the benefit of Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants deliberately wrongly claimed benefit of Notification No. 15/2004-ST dated 10.09.2004 and Notification No. 1/2006-ST dated 01.03.2006 which in respect of the service rendered by them were clearly and unambiguously not applicable. (2) No evidence of value of goods and material sold was submitted to the adjudicating authority for the purpose of Notification No. 12/2003. (3) The Hon'ble Delhi High Court in case of G.D. Builders Vs. Union of India 2013 (32) STR (673) (Del.) has held that service tax can be levied on the service component of any contract involving service and goods and computation of service component is a matter of detail and not a matter relating to validity of imposition of service tax. (4) In its judgment in case Bhayana Builders, it is inter alia stated that benefit of Notification No. 12/2003-ST is only in respect of value of goods/material sold by a service provider to a service recipient. 5. We have considered the facts and the submissions of both sides. 6. It is seen that the appellants during investigation by Revenue admitted to have claimed the benefit of Notification No. 15/2004-ST and Notification No. 1/2006-ST and the Show Cause Notice issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of the goods and material sold by the services provider to the service recipient. The adjudicating authority has held that the appellants had not given such proof and therefore they were not eligible for the benefit of the said Notification No. (12/2003-ST) 9. The appellants have contended that for claiming the benefit of Notification No. 12/2003-ST they are not required to show value of goods and material in the invoices. This contention of the appellants has force as Notification No. 12/2003-ST reproduced above does not prescribe any such condition. It is seen that CESTAT in various decisions including in the case of M/s. M.P. Vs. CCE, Jaipur 2012-ELT-has held accordingly. However, as service tax is required to be paid on a monthly basis it may be pertinent to state that for the purpose of computing the service tax liability under the benefit of Notification No. 12/2003-ST, the documentary proof specifically indicating the value of the relevant goods and material sold would need to be worked out on a monthly basis. 10. Bulk of the appellants appeal, cited case laws and reference to 46th constitutional amendment are on the point that service tax can't be charged on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the provisions of exemption have to be construed strictly and if the exemption is subject to certain conditions, the conditions have to be complied with and that the substantial compliance is not enough. Thus, it is simply not acceptable to grant the benefit of Notification No. 12/2003-ST merely on the basis of plausible explanations/approximations to the effect that overall the value of the goods used in providing completion and finishing services to all their services recipients during a certain period would have been more than 67% and therefore 67% deduction (which obviously they initially claimed under Notification Nos. 15/2004-ST and 1/2006-ST and were caught for having done so illegally) should be allowed to them under Notification No. 12/2003-ST. 11. At this juncture it is pertinent to refer to the appellants contention and cited case laws that their contracts being composite contracts covered under the scope of works contracts were not liable to service tax prior to 01.06.2007 when works contract service was made taxable. In this regard, it is to state that this contention is rendered untenable by the decision of Hon'ble Delhi High Court in the case of M/s. G.D. Bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exes as specified and in case of a composite contract, the service element should be bifurcated and ascertained and then taxed. (emphasis added) The contention that the petitioners are paying sales tax or VAT on material in relation to execution of the contract under composite contracts for construction of industrial/commercial complexes and construction contracts as specified under Section 65(105) (zzq) and (zzzh) therefore fails. The contention that there was/is no valid levy or the charging section is not applicable to composite contracts under clauses (zzq) and (zzzh) of Section 65(105) stands rejected. (comprises added) But the petitioners have rightly submitted that only the service component can be brought to tax as per provisions of Section 67 which stipulates that value of taxable service is the "gross amount charged. by the service provider for such services provided or to be provided by him and not the value of the goods provided by customers of service provider and the service tax cannot be charged on the value of the goods used in the contract. It is to be noted that the Hon'ble Delhi High Court, in this judgment in case of M/s. G.D. Builders (supra) took due note of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable on the service element of the contract for construction of industrial and commercial complexes and contract for construction of complexes and in case of composite contract, the service element should be bifurcated and ascertained and then taxed'. The Hon'ble High Court in the same para goes further to add that: the contention that there was/is no valid levy or the charging section is not applicable to composite contracts under clause (zzq) and (zzzh) of section 65(105) stands rejected.' Needless to say these are not obiter dicta; these are the distillates of proper analysis of the legal provisions and therefore constitute an integral part of the judgment (decision) in the said case. 13. Coming back to the applicability of Notification No. 12/2003, as discussed earlier the benefit of exemption Notification No. 12/2003-ST cannot be granted merely on the basis of overall estimation/approximations put forth and without any documentary proof specifically indicating the value of goods and materials sold in respect of the individual recipients of service as per the contracts entered into by the appellants with each of them. They have failed to produce such documentary proof ..... X X X X Extracts X X X X X X X X Extracts X X X X
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