9911796707
TMI Blog2024 (9) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... lowering of contract price on account of PAF less than 75%, is liable to service tax or otherwise? - HELD THAT:- Even though by way of credit note the contract price has been lowered but the same was on account of less performance with regard to PAF less than 75% as per contract between the respondent and service recipient. With this arrangement it is clear that when there is low performance i.e. PAF is less than 75%, the service is not as per the contract and for lower performance of service the amount was deducted by way of credit notes. It is also the fact that the amount of credit notes stand reduced from the contract price as mentioned in the contract therefore, the reduced amount of fees is the actual amount which is charged by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit involved in the spares and consumables on which no service tax was paid. Accordingly, the appellant is required to reverse the cenvat credit in respect of spares sold by them on which no service tax was paid. There are no infirmity in the order of the Adjudicating Authority therefore, Revenue s appeal is not maintainable hence the Revenue s appeal is dismissed. - HON BLE MR. RAMESH NAIR, MEMBER ( JUDICIAL ) And HON BLE MR. C. L. MAHAR , MEMBER ( TECHNICAL ) Shri Rajesh Nathan , Asst. Commissioner , ( AR ) for the Appellant Shri Rajat Bose Shri Neeladri C. Advocates for the Respondent ORDER RAMESH NAIR : This appeal is directed by the Revenue against the order-in-original whereby the Adjudicating Authority has dropped the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M fees for the service contract for the relevant operating year. The incentive is with regard to Unscheduled Interchange; Auxiliary power Consumption, Station Heat Rate Secondary Fuel Oil Consumption. (iii) Penalty with no Cap: This penalty is based on Progressive Plant Available Factor (PAF). Penalty is applicable for PAF Below 75%. In case the PAF below 75%, the monthly O M fees for Service Contract shall be correspondingly lowered using following formula : Net Payable for the Month = [Monthly Total Fee (OM Service Fee Spares Consumables Charges) x Progressive Achieved PAP/751 (iv) Incentive with no cap: Incentive available for PAF above 75% o 12.5 paisa per unit generated above 75% PAF. (II) Long Terms Spares Consumable Supply Agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of such spares and consumables liable to be included in the gross value of the service and to that extent, the Adjudicating Authority has wrongly dropped the demand of Rs. 3,25,16,268/-. 2.3 Accordingly, show cause notice was issued wherein the demand of differential service tax was raised. The Adjudicating Authority while adjudicating the order-in-original dropped the proceedings therefore, the Revenue has filed the present appeal. 3. Shri Rajesh Nathan, learned Asst. Commissioner, (AR) appearing on behalf of the Revenue reiterates the grounds of appeal. He also filed synopsis dated 16.07.2024, the same is taken on record and carefully considered the same. 4. On behalf of respondent Shri Rajat Bose, learned Counsel with Shri Nila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,35,771/- and pending amount of Cenvat credit was dropped. However, on the view expressed by this bench that when value of spares and consumables is not includible in the service charges then availment of Cenvat credit is not legal and correct. The Counsel fairly concede that though by order-in-original dated 03.09.2020 the demand of Cenvat credit was set-aside but he undertakes to reverse the credit. He also reiterates the submissions made in the cross-objection filed. He placed reliance on the following judgments:- (a) Safety Retreading Company (P) Limited Ors vs. CCE, Salem Ors 2017 (1) TMI 1110 SUPREME COURT (b) M/s. Kashi Hospital vs. CCE CGST, Varanasi 2024 (5) TMI 370 CESTAT Allahabad (c) CCE ST, Kutch vs. Vidyut Transformers Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly provides that gross value for charging service tax is the value which is charged towards provision of service. In the present case, the contract price minus credit note amount is the gross value charged by the respondent to service recipient M/s. GMDC Limited. Therefore, it is the reduced amount of service charge as gross value which is strictly in terms of Section 67 of the Finance Act, 1994 therefore, no further notional addition can be done for charging service tax. Accordingly, we are of the view that the Adjudicating Authority has rightly dropped the proceedings to the extent the demand of service tax on the credit note issued by the respondent to the recipient i.e. M/s. GMDC Limited. 6. As regard the demand of service tax on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
