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TMI Blog2018 (10) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... oticed that they provided completion and finishing services which are classifiable under commercial or industrial construction service with effect from 16.6.2005. Further, it was noticed that they split the gross value of services into material cost and labour charges by issuing separate bills and paid service tax only on labour charges. It appeared that the labour charges works out to approximately 33% of the total value and the assessee has availed abatement as provided under Notification No.1/2006-ST dated 1.3.2006. According to department, the materials are consumed in the course of providing the service and therefore appellants are not entitled to exclude the value of materials for the purpose of payment of service tax. Show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded findings on the applicability of Notification No.12/2003 - ST dated 20.06.2003 in the impugned order which is beyond the scope of show cause notice. The learned Commissioner classified the appellants‟ activities under Works Contract Service and demanded service tax from 16.06.2005 to 31.07.2008 though Works Contract Service was introduced only from 01.06.2007. Therefore the entire order is beyond the scope of allegations made in the show cause notice. 2.4 It is submitted that in the impugned order it is stated that even though the appellants were showing the value of goods separately for each and every items actually these items were not sold to the customers but all the materials were consumed by the assesse themselves fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s separately. 2.7 The exemption contained in the said Notification No.12/2003 dt.20.6.2003 is available to all services. Further when the appellants avail the said Notification No.12/2003 abatement under Notification No.1/2006 is not available. Further the scope of Notification No.12/2003 is explained in CBEC Circular No.59/8/2003 (F.No.B3/7/2003-TRU) dt.20.6.2003. 2.8 The audit party audited their records in accordance with the principles laid down in the EA2000 on 24th and 25th of May 2007 and 11th and 12th of August 2008. During the course of audit and as instructed by the audit party the appellants have presented all their records including income tax returns, invoices, bills, balance sheet, P&L accounts pertaining to the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice it is alleged that the appellants bifurcated the value of purchase order into charges for materials and labour charges and they paid service tax only on the labour charges. Thus department has demanded service tax on the value of materials under the category of commercial or industrial construction service (finished services) denying them the exemption under Notification No. 15/2004-ST dated 10.9.2004 as amended by Notification No.1/2006-ST dated 1.3.2006. Thus, the department has proceeded to demand service tax treating the work as a composite contract involving both service and supply of materials. The abatement under Notification 1/2006 has been denied to the appellant by the department stating that the materials involved are con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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