2013 (9) TMI 391

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....er adjudication, the service tax is demanded only in respect of two projects as under:- S. No. Project Name Taxable Value (Rs.) S. Tax demanded (Rs.) 1 Meadows Residential 64,53,73,079/- 67,02,463/- 2 Pacifica Commercial 186,54,05,405/- 18,25,77,425/- Total 18,92,79,888/- 2. We have heard both sides extensively on their arguments. For the purpose of stay, the counsel for the appellant is willing to deposit the impugned demand of about Rs.67 lakhs relating to Meadows Residential project. Therefore for the purposes of stay, the merits of the case is not being discussed. In the case of the second project, he contents, no demand will arise. 3. Dispute in respect of Pacifica Tech Park 3.1 The ba....

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....ct cannot be divided into two one or supply of material and other for providing services is not correct. He relies on 366 (29-A) (b) of the Constitution of India and the judgment of the Apex Court in the case of State of Andhra Pradesh Vs. Larsen and Toubro-[(2008) 9 Supreme Court Cases 191]. 3.4 Revenue's case is that the appellants cannot split the value of contract artificially into material cost and service cost. According to them the impugned goods are not materials sold but actually materials consumed in rendering the service of construction of complex. Revenue has not allowed CENVAT Credit of duty paid on materials used because the appellants have not claimed it. But the fact remains that many of the materials used in construction....

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....ute. 4. Prima facie the legal question of divisibility of the contract into sale of materials and for providing construction service seems to be supported by Article 366 (29-A) (b) of the Constitution of India and the judgment of the Apex Court in the case of State of Andhra Pradesh Vs. Larsen and Toubro-[(2008) 9 Supreme Court Cases 191]. The principle involved has been explained by the Apex Court in the decision in the case of Bharat Sanchar Nigam Ltd. Vs. UOI-2006 (2) S.T.R. 161 (S.C.) also. Even if this question is answered in favor of the appellants the question arises as to whether such division has been done in an arbitrary manner or based on evidences and if so what type of evidence. An assessee cannot choose to pay either VAT or....