9911796707
TMI Blog2024 (9) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... 'In such position the entire value of the goods has to be taken as sale value, consequently, no service value is involved separately. In the identical set of transaction, this tribunal has consistently taken a view that when there is a manufacturing and sale of the goods on a particular sale price which involves incidental service such as in the present case, no service tax can be demanded once the entire value is towards sale and has suffered the central excise duty.' From the above decision which has relied upon other decisions of the Tribunal, it is observed that the facts in the aforesaid decision and facts of the present case are identical. Therefore, the ratio of the above judgment is directly applicable. The demand in the present case is not sustainable. Accordingly the impugned order is upheld - appeal dismissed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C L MAHAR, MEMBER (TECHNICAL) Shri Sanjay Kumar, Superintendent (AR) appeared for the Appellant Shri Amal Dave, Advocate appeared for the Respondent ORDER The brief facts of the case are that the appellant are engaged in the manufacturing of Weaving preparatory TFO Winding machines and are also providing insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the service related to erection, commissioning and installation. In such case there is no amount available for charging service tax. The issue has been considered by this Tribunal in the case of C.C.E. S.T. Silvasa Vs. AlidharaTextool Engineers Pvt. Ltd. (supra) wherein this Tribunal has passed the following order: 04. We have carefully considered the submissions made by both the sides and perused the records. We find that there is no dispute that the respondent is a manufacturer of textile machinery and as per the contract they have supplied the goods along with Erection, Commissioning and Installation at the buyer s site. On the entire activity, right from the manufacturing upto the commissioning of machinery at buyer s site, the total value is towards the sale of goods. There is no bifurcation of the value in sale of goods and service of Erection, Installation and Commissioning. In such position the entire value of the goods has to be taken as sale value, consequently, no service value is involved separately. In the identical set of transaction, this tribunal has consistently taken a view that when there is a manufacturing and sale of the goods on a particular sale p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -5-2006 erection, commissioning or installation means any service provided by a commissioning and installation agency, in relation to - (i) erection, commissioning or installation of plant, machinery, equipment or structures whether pre-fabricated or otherwise; or (ii) Installation of (a) electrical and electronic devices, including wirings or fittings therefore; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, or (d) thermal insulation sound insulation fire proofing or water proofing (e) lift and escalator fire escape staircases or traveators; or (f) such other similar services. As is seen from the above, the one of the ingredients of the definition is that services must be provided by commissioning and installation agency. Admittedly, the appellant is not an agency engaged in providing services of Installation, erection and commissioning etc. They are essentially a manufacturing unit engaged in the manufacture of textile machinery, which is undertaken to be supplied to their customer in a fully commissioned state. 10 . Tribunal in the case of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le High Court fully covers the legal issue in the present case. 12. Similarly in the case of CCE, Vapi v. Alidhara Textool Engineers Pvt. Limited - 2009 (14) S.T.R. 305 (T) = 2009 (239) E.L.T. 334 (Tri. - Ahmd.) it was observed as under :- 4.1 In this case erection and commissioning charges have been included in the cost of the machines sold. The appellants have selected the agency to do this work and once the purchaser enters into an agreement for supply of the machine including the erection and commissioning charges, the responsibility for erection and commissioning is of the manufacturer. Therefore what is happening in this case is that the supplier of the machine is not only selling the machine but is also providing the service of erection and commissioning. Once erection and commissioning cost is included, in the transaction value the natural conclusion that would emerge is that the processes undertaken in the buyer s premises are actually incidental to manufacturing activity undertaken in the manufacturer s premises. What has been sold in this case is the complete machine duly erected and commissioned and operational. The incidental process of erection and commissioning being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner in his impugned order laying to the contrary, cannot be followed inasmuch as the same stands rendered by a Single Member Bench in contradiction to the Divisional Bench judgment available in the case of Allengers Medical Systems Limited (referred supra). Further the said judgment in the case of Lincoln Helios (India) Limited was rendered in the year 2006 whereas the Allengers Medical Systems judgment stands passed in the year 2009, which stands passed after considering the Hon ble Supreme Court judgment in the case of State of Andhra Pradesh v. Kone Elevators (India) Limited - 2005 (181) E.L.T. 156 (S.C.), as also Tribunal decision in the case of Idea Mobile Communications Limited v. Commissioner - 2006 (4) S.T.R. 132 (Tribunal). 15 . In view of our above discussions, we hold that appellants were not liable to pay any service tax. Accordingly, the impugned order confirming the demand and imposing penalties upon them is set-aside and appeal is allowed with consequential relief. Inasmuch as we have allowed the appeal on mere, the issue of demand being barred by limitation is only of academic interest and its not being gone into. M/s. Allengers Medical Systems Ltd.- 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer premises. We are unable to accept the contention of the learned DR. We are of the view that whether the activity is service or sale would be determined on the basis of examination of the contract between the parties and evidences. 6 . The Hon ble Supreme Court in the case of Kone Elevators (I) Pvt. Ltd. (supra) held that the substance and terms of contract, customs or trade and circumstances/facts of each case are to be looked into in this aspect. In the said case, the Hon ble Supreme court held that if the main object of contract is transfer of finished goods, it is contract of sale. If the main object is work and labour and property passing by accessories during the process of work to the movable property of customer, it is works-contract. The relevant portion of the decision of the Hon ble Supreme court in the case of Kone Elevators (I) Ltd. supra is reproduced below : It can be treated as well settled that there is no standard formula by which one can distinguish a contract for sale from a works contract . The question is largely one of fact depending upon the terms of the contract including the nature of the obligations to be discharged there under and the surrounding circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. (a) In the case of Moriroku UT India (P) Ltd. (supra), it has been held that liability under excise law is event based irrespective of whether the goods are sold or captively consumed. (b) In the case of N.M. Goel Co. (supra), it has been held that in order to be sale and levy of duty, not only the property in the goods should pass from the contractor to the Government, but they should be independent contract, separate and distinct, apart from mere passing of the property. (c) In the case of Imagic Creative Pvt. Ltd. (supra), the issue is whether the service provider paying service tax is liable to Sales Tax/VAT which are mutually exclusive. It has been held that having regard to the respective parameters on service tax and the sales tax as envisaged in a composite contract, from an indivisible contract levy would be determined. 9 . We find that in the instant case, the appellant engaged on business of manufacturer and sale of medical equipment and no separate contract for erection and installation of the medical equipments. The erection and installation charges are covered in the value of the medical equipments and the central excise duty was discharged thereon. So, the case l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing with manufactured item held that if the contract is all inclusive lump-sum without any separate split up for erection and commissioning and excise duty was discharged on the whole value, there is no liability to service tax on the part of the value. 7. We find, prima-facie, the split up of value for service tax purpose, when the whole value has been subjected to customs duty towards import of goods, is not sustainable. However, the basic facts like contract and the invoices alongwith the other issues raised by the appellant is to be examined afresh by the original authority. We also note that composite non-vivisectable contracts are not liable to service tax under the category of works contract service prior to 01.06.2007 as held by the Hon ble Supreme Court in Larsen Tubro Ltd. 2015 (39) STR 913 (SC). 8. Considering the need for verifying all the factual details and non-consideration of facts placed by the appellant at the 5 ST/186/2012-ST [DB] time of original decision, we find it fit and proper to remand the case to the original authority for a fresh decision. Since the matter is remanded, all other issues are kept open including the question of time bar raised by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
