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TMI Blog2024 (5) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax.' As the issue has already been decided in favour of the appellant, therefore, following the analogy of the said order, it is held that the demand against the appellant is not sustainable as the appellant has already discharged their Service Tax liability on gross value of works contract i.e. Contract II and value of Contract I is not to be included in the assessable value of taxable service provided by the appellant. The impugned order set aside. Consequently, no penalty is imposable on the appellant. Accordingly, penalty imposed on all the appellants are also set aside. Appeal allowed. - HON BLE SHRI ASHOK JINDAL , MEMBER ( JUDICIAL ) And HON BLE SHRI K. ANPAZHAKAN , MEMBER ( TECHNICAL ) Shri Prasad Paranjpe , Advocate for the Appellant Shri P. Das , Authorized Representative for the Revenue ORDER Per : ASHOK JINDAL : All these appeals are having common issue, therefore, all are decided by a common order. 2. The facts of the case are that the main appellant M/s.TRF Limited is manufacturer of machinery and machinery parts and also undertaking works contracts for large projects involving service and sale of goods as works contracts. 2.1 Under the sale contract, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue, this Tribunal has dropped the demand vide Final Order No.75328-75330/2024 dated 21.02.2024. Therefore, in these cases also as the issue is no more res integra, the appeals be allowed. 4. The Ld.AR for the department reiterates the findings of he impugned order. 5. Heard the parties. 6. Considering the fact that the issue involved in the matters have been examined by this Tribunal in appellant s own case for the earlier period, wherein this Tribunal observed as under:- 6. We find that the facts are not in dispute. The agreements were entered by the appellant and the service recipient prior to 07.07.2009 i.e. 19.02.2008 and 04.12.2008 and it is not in dispute that the appellant started execution of works prior to 07.07.2009 and raised invoices and also received payments thereof. In that circumstances, the CBEC Circular No.150/1/2012-ST dated 08.02.2012 is relevant to decide the present issue. For better appreciation of law, the said Circular is extracted below : Meaning of expression gross amount as per Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 Regarding Circular No. 150/1/2012-S.T., dated 8-2-2012 F.No. 354/236/2010-TRU Government of India Min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will not be includible to determine the gross amount for the purposes of payment of service tax. 7. The same view has been taken by this Tribunal in the case of Essar Projects (India) Limited (supra), wherein this Tribunal has observed as under : 9.1 It is clear from the above Circular issued by C.B.E. C. that where execution of works contract has commenced prior to 7-7-2009, in those cases gross amount, for the purpose of payment of Service Tax, will not include the free of cost supply by the service recipient. In this regard, appellant has argued that as per clause 15.4 of the Supply Contract, reproduced below, full rights/title/ownership in respect of each item of the Balance of Plant stand transferred to the owner on delivery by the supplier at the site :- 15.4 - The full right, title, ownership and interest and all risks (except for those specifically retained by the Supplier in accordance with the terms of this Contract) in each item of the Balance of Plant shall be transferred to the Owner upon Delivery by the Supplier of that item of the Balance of Plant at the Site and upon endorsement of the documents required under Article 15.1. 9.2 In view of the above clause of the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the collaborator induced any extra commercial obligation for the price of CKD packs, parts and components. Ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs. It is, no doubt, open to the revenue to allege and prove that the apparent is not the real and that the price for the sale of the CKD packs is not the true price, and the price was determined by reckoning or taking into consideration the lumpsum payment made under the collaboration agreement in the sum of 15 million French Francs. The short question is whether the revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price and so Section 14(1)(b) of the Act was properly invoked. 11. In view of the law laid down by the Hon ble Supreme Court, a contract has to be interpreted in a manner from the apparent tenor of the agreement and apparently it has to be accepted as the real state of affairs. 12. The judgment of ITAT relied upon by the Revenue is not applicability to the facts of this case because the Income Tax law is applied in altogether in a different sphere of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to 07.07.2009. Needless to say that there is no separate payment under the umbrella contract because it was only a combination of the other three contracts. This issue was agitated by the appellant before the adjudicating authority who, however, did not agree with this contention on the following words: 7.1. The issue required to be decided in these proceedings is whether the contracts dated 12.08.2009 with service recipients, commenced before and payments received before 7.7.2009 can be considered as separate contracts or as one contract. It has been argued by the appellant that both the contracts are independent and cannot be considered as one for the purpose of determining taxable value of the service provided. It was further argued that even if two contracts are treated as one, still appellant s case will not be covered under the Explanation added with effect from 7.7.2009 in Rule 3(1) of the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007. In view of the findings above and nature of EPC works contract service and the existence of only one contract No. for all the supply and the service contracts, the scope of supply/work being the same i.e. ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above, we find that the demand of service tax and interest and imposition of penalties in the impugned order are not sustainable and the impugned order is liable to be set aside and we do so. 10. The appeal is allowed and the impugned order is set aside. 9. As it is evident that all the contracts were entered by the appellants with the service recipient prior to 07.07.2009 and the invoice has been issued and the payment was also received. In that circumstances, in terms of CBEC Circular No.150/1/2012-ST dated 08.02.2012, the value of supply of goods contract, which were executed by the appellant and the same were given to the appellants for execution of Contract II, were the contract value, in that circumstances, the value of goods in Contract I cannot be included for determination of gross value for payment of service tax. Therefore, the appellant is correctly discharged their service tax liability on gross value of works contract i.e. Contract II. 10. In view of the above observations, we set aside the impugned demand. Consequently, we waive the penalties imposed on all the appellants. 11. In the result, we set aside the impugned order and allow the appeals with co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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