Works contract exemption for goods value cannot be denied solely for lack of invoice-wise breakup when supporting records and tax payment exist.

Exemption under Notification No. 12/2003-S.T. may not be denied merely because invoice-wise quantification of goods and materials is unavailable, if the assessee maintains supporting records and the goods have suffered sales tax or VAT in the course of works execution. The Tribunal treated the Revenue's authorities as distinguishable and found that the applicants had shown a prima facie case for waiver of pre-deposit. On that basis, it granted stay of recovery during the pendency of the appeal and waived pre-deposit of the disputed service tax, interest and penalty.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit by claiming the benefit of Notification No. 12/2003-S.T. in respect of the value of goods and materials sold in the course of the works.

Analysis: The demand had been denied on the ground that the applicants did not produce invoice-wise documentary proof showing the value of goods and materials sold. The order relied on the Tribunal's earlier view that, where sales tax or VAT had been paid on the value of goods consumed or sold in execution of the contract, exemption could not be denied merely because the cost of materials was not separately indicated in each invoice, so long as relevant records were maintained. The cases relied on by the Revenue were treated as distinguishable on facts.

Conclusion: The applicants established a prima facie case and were entitled to waiver of pre-deposit of the entire service tax, interest and penalty, with stay of recovery during pendency of the appeal.

Final Conclusion: The interim application was allowed and coercive recovery was stayed pending disposal of the appeal.

Ratio Decidendi: Exemption relating to the value of goods and materials sold cannot be denied merely for want of invoice-wise quantification if the records supporting such sale are maintained and the goods have suffered sales tax or VAT.

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