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TMI Blog2019 (4) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... escription the contract, it contained of 'Preservation and Maintenance' of the properties of DPC covered the power plant phase I & II, LNG Terminal, Jetty, Naphtha, Single Point Mooring, housing complex etc. The contract initially used to be for a period of six months and the appellant used to issue monthly R.A. bills on pro-rata basis for the total amount to be received by them as shown in the contract. On each of such R.A bills, the description of the activity/service was mentioned as "Asset maintenance & preservation of power plant, LNG Terminal, Jetty, single point Mooring System including additional maintenance & preservation" and against that, the total amount charged was mentioned. The R.A. bills do not have any bifurcation of the amount billed; it only shows the total amount charged. The bills do not have any separate details showing details of goods and material and value thereof which were consumed/used during the course of providing services of Preservation and maintenance. The investigations were conducted against the appellants by the officers of Anti-evasion Squad-I of Pune II Commissionerate considering that the said activity of the appellant described as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices when provided in respect of maintenance or servicing of any goods or equipment. It has been contended that the immovable properties not being "goods or equipment" were not covered under the taxable service as defined under Section 65(64) of the Finance Act, 1994 prior to 16/06/2005 when this section was amended to include in its scope the maintenance or repair service of immovable properties also. The appellant further claimed that deductions on account of raw materials/goods consumed were admissible to them as they had provided sufficient proof in the form of returns submitted by them to the VAT/ Sales Tax authorities about the VAT/ sales Tax paid by them on these raw materials/goods used in providing the service. That notification 12/2003-ST dated 20/06/2003 did not contain any requirement of sowing the same separately in the invoices. The appellant further claimed that the show cause notice was barred by limitation as they had paid the service tax from December 2004 onwards whereas show cause notice was issued to them 23/11/2016. The adjudicating authority vide the impugned order i.e. Order-in-Original no. 13/JM/2010 dated 10/03/2010 confirmed the whole demand of Rs. 6,47, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y: (i) any person under a maintenance contract or an agreement; or (ii) a manufacturer or any person authorized by him, in relation to maintenance or repair or servicing of any goods or equipment, excluding motor vehicle" As per the new Section 65 (64) of the Act ibid w.e.f. 16/6/2005, the definition of `maintenance or repair service' means "any service provided by- (i) any person under a contract or an agreement; or (ii) a manufacturer or any person authorized by him, in relation to: a. maintenance or repair' including reconditioning or restoration or servicing of any goods or equipment, excluding motor vehicle; or b. maintenance or management of immovable property" As per Section 65 (105) (zzg) of the Act ibid, taxable service under the category "maintenance or repair services' means any services provided or to be provided" to a customer, by any person in relation to maintenance or repair." 2. The learned Counsel has placed reliance upon the decision in the case of CCE, Ahmedabad vs. GE-Noova Pigone [2012 (27) STR 380 Tri-Ahd] wherein a similar issue canvassing maintenance of gas turbine was involved. The Hon'ble Tribunal held that, every eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the Finance Act as also under Notification No 12/2003-ST dated 20/06/2003. He argued that in typical maintenance contracts, separate sale of materials are not envisaged and it is during the course of such service that the sale gets effectuated. He placed reliance on the judgment of the Hon'ble Supreme Court in the case of Xerox Modicorp Ltd. vs. State of Karnataka {2005 (7) S.C.C. 380]. He cited the "7. Even though at first blush the submissions of Mr. Ganesh may appear attractive. on a proper consideration, we think that Mr. lyer was right when he submitted that the agreements are not just service contracts but also maintenance contracts. Mr. lyer is right that the machines belong to the customer after they are sold to them. If after sale some part was to be replaced or some component supplied there would be sale as understood in law. Under the agreements, apart from the service element for which no tax is sought to be levied there is the element of supplying parts and components like toners/developers etc. Mr. lyer is right in submitting that merely because price is not being separately charged for this, this does not detract from the position that the supply is for a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly. 7. The learned AR from the Revenue argued that the Oder-in-Original passed by the adjudicating authority was legal and proper was maintenable. He also relied upon the case law in Chandan Electrical vs. Commr. of C. Ex. & ST Ludhiana [2017 (48) S.T.R. 152 (Tri.-Chan.) where it was held that exemption w.e.f. 16/06/2005 from Service Tax under section 98(1) of the Finance Act, 1994 was not available to maintenance and repair of tube-well, street lights and fountains owned by Municipal Council as these were not building parts in common parlance of non-commercial Government Buildings. 8. We have carefully examined the arguments of the learned Counsel of the appellant and the learned AR. Before proceeding to decide the issue at hand, we first discuss the findings of the Commissioner with respect to two main issues (i) whether the impugned maintenance and services are with respect to immovable property or with respect to "goods and equipment" (ii) whether the value of raw materials/ parts consumed in providing the impugned services are deductible from the taxable value. The Commissioner's findings in para 19 of the Order-in-Original are reproduced below:- "19. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided the services of maintenance of preservation of power plants, LNG Terminal which are goods and equipment without any discussion or examination whether the maintenance or repair services have been provided with respect to the immovable property or with respect to the "goods and equipment". Whereas we apparently find that the impugned services to Power Plant/ LNG terminal are with respect to immovable property but we refrain to pass any order in this respect as the party had initially voluntarily deposited the service tax amount after owning their liability towards this service and even raised revised taxable invoices to their customers. Hence, the issue may be examined in totality and a well reasoned order be passed after providing opportunity to the appellants to justify their claim that the said services were in respect of immovable property or not. Even on the issue of acceptance of invoices/Chartered Accountants Certificate whereas it has been accepted that such invoices/ CA certificate tallies with the quantification in the show cause notice but the claim has been merely rejected on the basis that in the revised invoices the assessee has not mentioned the item/material ..... X X X X Extracts X X X X X X X X Extracts X X X X
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