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TMI Blog2022 (2) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... g and maintenance and repairs of lifts, elevators. They hold Central Excise registration under the category of "Erection and Commissioning Services" and "Maintenance and Repair Services". During the course of audit, it was noticed that the appellant received orders for the provision of lift / elevators at the customers' site as per their requirement and an agreement / contract for supply, installation, testing and commissioning of the lift was entered into between the appellant and their customers. The agreements specified type of lift and its specifications including warranty and maintenance conditions and also enumerated the items / work in the nature of providing shafts, pits essential for the execution of the contract which was required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in notionally at 85% of the contract value and remaining 15% as the value of labour involved for payment of service tax. 5. The department entertained a view that value adopted by the appellant for payment of VAT was not the actual value of the goods supplied while providing lift / escalators and that it was only a notional value. The service being in the nature of a work contract service for original works, service tax is liable to be paid on 40% of the contract value. Show cause notice was issued for different periods proposing to demand short paid service tax along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed equal penalty which was upheld by C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Pvt. Ltd. (supra), the Hon'ble Supreme Court has held that the service of manufacture, supply and installation of escalators/lifts is works contract service. In the case of Larsen & Toubro (supra), the Hon'ble Apex Court as held that works contract prior to 1.6.2007 are not subject to levy of service tax. Following the principles laid down in the two judgments, we hold that the demand prior to 1.6.2007 is unsustainable and therefore requires to be set aside which we hereby do. 10. As per the Table given above, a small portion of the demand pertains to 1.6.2007 to 31.7.2007. It is not disputed that the appellant have discharged service tax on 15% of the value of the contract and also that they have paid VAT/Sales Tax on 85% of the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 1.6.2007 and also set aside the differential duty demand for the period 1.6.2007 to 31.7.2007 beyond that is discharged by them on 15% of value of contract. The penalties are also set aside. The appeal is partly allowed in the above terms." 7. Ld. Counsel submitted that the Hon'ble Apex Court in the case of Safety Retreading Company Pvt. Ltd. Vs CCE Salem 2017 (1) TMI 1110 - SUPREME COURT = 2017 (48) STR 97 (SC) held that value of the materials / goods cannot be considered for payment of levy of service tax in the execution of a works contract. 8. Ld. Counsel further submitted that in the case of Ocean Interior Limited Vs CGST & Central Excise, Chennai - 2019 (11) TMI 124 - CESTAT CHENNAI, the Tribunal held as follows : "7.3 The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in execution of the contract. 8.2 The Tribunal in the case of M/s. Singh Sales and Services Vs. Commr. of Cus., C.Ex. & S.T., Allahabad reported in 2017 (52) S.T.R. 38 (Tri. - Allahabad) has held that value of goods/spare parts supplied and used for providing service are not includible in the taxable value. 8.3 In M/s. Sobha Developers Ltd. Vs. Commissioner of C.Ex. & S.Tax, Bangalore reported in 2010 (19) S.T.R. 75 (Tri. - Bang.) it was held that the material value sought to be included on the ground that goods are consumed in provision of service and not sold, cannot sustain." 9. Ld. A.R Ms. Sridevi Taritla appeared for Revenue and reiterated the findings in the impugned orders. 10. From the facts of the case and submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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