TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 454
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.... jurisdictional superintendent, and it was noticed by the Supdt. that they have pad service tax and filed cenvat credit on the works contract services. It was jurisdictional superintend's view that in respect of taxable services; 'works contract services', appellant had no option to pay full service tax and had to pay reduced service tax as per provision of rule 2A of the Service Tax (Determination of values) Rules 2006 and or to pay service tax under composition scheme in terms of work contract (Composition Scheme) for payment of Service Tax Rule 2007. Coming to such a conclusion, show cause notice dated 10/12/2009 was issued to the appellant directing to show cause as to why the cenvat credit availed by them on cement, channels, CTD or TMT bars and other items used for construction of factory shed, building and foundation be not disallowed and interest be charged on such amount and why penalty be not imposed . Such show cause notice was contested by the appellant before the adjudicating authority on various grounds. The adjudicating authority after following due process of law vide impugned order confirmed the demand raised in the show cause notice alongwith interest and as also ....
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..... 4. For this proposition, he would rely upon the decision of the apex court in the case of South India (P) Ltd., vs. Secretary Board of Revenue, Tvm, (AIR.164.SC.207.215). It is also his submission that the provision of Rule 3 of the composition rules would also need not to be gone into and after taking us through the said rules he submits that the said Rule 3 specifically starts with an 'non-obstante' clause and hence the provisions of the rule 3 of composition rule needs to be applied only in cases where an assessee opts for discharging Service Tax on reduced rates. It is also his submissions apex court in case of Chandavarkar Sita Ratna Rao vs Ashalatha S Guram (AIR.1987.SC.117) had explained the scope of effect of non obstante to maintain that the provisions embraced in the non obstante clause will not be impediment for the operation of the enactment. It is his submission that Rule 3 of Composition Rule is merely another option provided to the service provider for discharging of service tax liability. It is his submission that the department wants to impose upon the appellant valuation under the Rule 2A of Service Tax Valuation Rules and or Rules 3 of works Contract Compositi....
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....re accepting that it is work contract services which are provided, they should have discharged the service tax liability on the amount as is required to be calculated under the provisions of Rule 2A of the Service Tax Rules or Rule 3 of Composition Rules. It is his submission that both the authorities were correct in holding that the appellant has done wrong by availing cenvat credit and passing on the same to service recipient. 6. We have considered the submissions made at length by both sides and perused the records. 7. Undisputed facts are appellant were awarded a contract by Clasic Marbles Impex Pvt Ltd., for setting up of their plant which involved procurement of materials and erection. The appellant herein had discharged the service tax at 12.36% ie., full tax on the entire value of the contract under work contract services and availed cenvat credit of the duty paid on inputs like steel, cement and various other services. It is also undisputed that the Cenvat Credit was availed, on correct and valid documents. 8. The only question that arises for decision in this case is as to whether the appellant are correct in paying full rate of Service tax @ 12.36% or 10.30% (includin....
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.... includes any currency, cheque, promissory note, letter of credit, draft, pay order, travellers cheque, money order, postal remittance and other similar instruments but does not include currency that is held for its numismatic value; (c) 'gross amount charged' includes payment by cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and book adjustment, and any amount credited or debited, as the case may be, to any account, whether called 'Suspense account' or by any other name, in the books of accounts of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise. 12. It can be seen from the above reproduced Section, Service Tax liability is to be discharged on the gross amount charged by the service provider. In the case in hand there is no dispute as to the value or gross amount which needs to be considered for discharge of service tax liability. It is admitted by both sides that the value of the works contract executed by the appellant is the value on which the appellant has discharged full rate of service tax. We find from the above reproduced Section 67 of Finance Act 1....
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....requires,- (a) 'Act' means the Finance Act, 1994 (32 of 1994); (b) 'section' means the section of the Act; (c) 'works contract service' means services provided in relation to the execution of a works contract referred to in sub-clause (zzzza) of clause (105) of section 65 of the Act; (d) words and expressions used in these rules and not defined but defined in the Act shall have the meanings respectively assigned to them in the Act. 3. (1) Notwithstanding anything contained in section 67 of the Act and rule 2A of the Service (Determination of Value) Rules, 2006, the person liable to pay service tax in relation to works contract service shall have the option to discharge his service tax liability on the works contract service provided or to be provided, instead of paying service tax at the rate specified in section 66 of the Act, by paying an amount equivalent to two per cent. of the gross amount charged for the works contract. Explanation.- For the purposes of this rule, gross amount charged for the works contract shall not include Value Added Tax (VAT) or sales tax, as the case may be, paid on transfer of property in goods involved in the execution of the said works con....