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TMI Blog2025 (1) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... S AALIDHRA TEXTOOL ENGINEERS PVT LTD [ 2022 (12) TMI 11 - CESTAT AHMEDABAD] wherein this Tribunal has held that 'in the present case where the entire value has suffered excise duty and the buyer is under obligation to not only manufacture and supply the machinery but also to carry out activity of erection, commissioning and installation of the said machinery, the service tax cannot be demanded.' Conclusion - The entire value of the goods has to be taken as sale value, consequently, no service value is involved separately. Appeal of Revenue dismissed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C L MAHAR Shri Mihir G Rayka , Addl. Commissioner ( AR ) for the Appellant Shri Amal Dave , Advocate for the Respondent ORDER RAMESH NAIR The brief facts of the case are that the respondent are engaged in the manufacturing of Draw Texturising machines and are also providing installation and commissioning service of the said machine to their customers. During the relevant periods the appellant have sold various machines to the customers and have also carried out installation and commissioning of these machines in the premises of thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the facts of the present case the respondent have manufactured and supplied the textile machines as per the contract and sale invoice was issued to the customers. The respondent-assessee is supposed to undertake the supply and also the erection, commissioning and installation of the machine at the customer s site. The sale value includes all the elements and there is no separate consideration received by the respondent on 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 respondent s own case of C.C.E. S.T. Silvasa Vs. Alidhara Textool Engineers (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 tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electronic devises, 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; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar services; (III) From 1-5-2006 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the process of manufacture as defined under Section 2(14) of the 1915 Act falls within the ambit and sweep of the Section 2(f) (1) of Central Excise Act, 1944 and therefore, there can be no levy of service tax on the manufacturer in view of the clear postulate under Section 65(76b) of the Finance Act, 2005. Though the above judgment was given in the different facts and circumstances but we find that observations made by the Hon ble 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 commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing activity and the purchase orders are for the complete plant ind machineries, duty commissioned, without showing any segregated amount recovered for erection and commissioning and where the entire contract value is taken as an assessable value for the purpose of payment of excise duty, no service tax is liable to be paid by the assessee. The decision of the Tribunal in the case of Lincoln Helios (India) Limited relied upon by 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods and Central Excise duty was paid thereon. There is no material placed by the Revenue that the appellants charged separately for erection and commissioning of equipments. In this context, the levy of service tax on such activity like erection, commissioning and installation is not proper and legal. The learned DR contended that the OBDI indicates contract for erection and installation of the medical equipments at the customer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants manufactured and hold the medical equipment. It is revealed from the record that the activity of installation, erection and commissioning are incidental to delivery of goods to the customers. Therefore, there is no reason for levy of service tax on the installation and commissioning of medical equipment. 8. The learned DR relied upon the decisions of the Hon ble Supreme Court which are not applicable in the present case. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuation we ST/186/2012-ST [DB] find that the question of subjecting a portion of the invoice value for service tax purpose is not sustainable. In this connection, we refer to the decision of the Tribunal in Allengers Medical Systems Ltd. vs. C.C.E., Chandigarh 2009 (14) STR 235 (Tri.-Del.) and Alidhara Texspin Engineers vs. Commissioner of Central Excise Customs, Vapi - 2010 (20) STR 315 (Tri.-Ahmd.). 6. The Tribunal, though 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 along with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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