TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1119
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....appellants on an offer for coal tar coating and polythelene coating of bare pipes was accepted by IOCL on 28.6.2004. On such day of the contract, there was no service tax liability on the activity either under goods transport agency or under business auxiliary service. 2. As per the terms and conditions of letter of acceptance the appellant have to take delivery of pipes from Nagathone (Maharashtra) pipe mill of M/s. Maharashtra Seamless Ltd. for Part I and II and from Bahdurgarh (Haryana) pipe mill of M/s. Surya Roshini Ltd. for Part III. The appellants undertook the job of coal tar coating of the pipes and polythelene coating on the pipes supplied by IOCL and to deliver the coated pipes to the mainline laying contractor as per the instructions of IOCL. Thus as per the contract, the activity undertaken by the appellants inter alia are (i) goods transport agency service for transport of pipes from Nagathone / Bahdurgarh to the factory of PSL Ltd. by Vaiyavoor and (ii) coal tar coating and polytehelene coating. The goods transport agency service was not taxable till 1.1.2005. However, the appellant having registered under the category of business auxiliary service for the purpose o....
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....t had arrived at the quantum of service tax applicable to inward transportation by applying a formula. The documents were furnished before the Range officer and the worksheet of arriving the quantum of refund of service tax was also supplied. iii) The adjudicating authority has wrongly held that unless the transportation cost of bare pipes (before coating) is shown separately in the invoices/voucher, there is no proof for payment of transportation cost. That this question was addressed by the appellants by furnishing the work sheets. Though freight charges were not shown separately, the cost of transportation is very clearly identifiable from the bills of the transporter. That assuming the transport bills were not available, the entire amount paid cannot relate to Business Auxiliary services (coating service) which is clear from the contract. The appellants supported their claim, by producing bills of transporter, which is based on the rate for transportation contracted with the transporter. That both authorities below erred in observing that the cost of transportation is not supported by proof. iv) IOC had specifically stipulated that appellant should take delivery of the pipe....
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....f the invoice copies placed on file if these two elements are removed from the contract price it would clearly tally with the basic rate shown in the worksheet. This is explained as under: 1 Invoice No.1825 dated 4-11-2004 Quantity 308.490 mts. Invoice value Rs.131417.00 Contract price per metre Rs. 426 Less Works contract tax at 4.2% (426/104.2x 4.2) Rs. 17 Invoice rate (basic) Rs. 409 Less Outward freight charges Rs. 25 Balance = Basic price Rs. 384 Basic amount in the worksheet (308.490 mtr x Rs. 384) Rs. 118460 2 Invoice No.1846 dated 8-11-2004 Quantity 308.660 mts. Invoice value Rs.131489.00 Contract price per metre Rs. 426 Less Works contract tax at 4.2% (426/104.2x 4.2) Rs. 17 Invoice rate (basic) Rs. 409 Less Outward freight charges Rs. 25 Balance = Basic price Rs. 384 Basic amount in the worksheet (308.660 mtr x Rs. 384) Rs. 118535 3 Invoice No.1801 dated 2-11-2004 Quantity 254.250 mts. Invoice value Rs.115175.00 Contract price per metre Rs. 453 Less Works contract tax at 4.2% (453/104.2x 4.2) Rs. 18 Invoice rate (....
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.... of various sizes with Basic. Rate details submitted by the assesse it is seen that the Basic Rate shown is lesser by about 10 percent than that of the one mentioned in the contract which has not been properly explained by the assessee at any point of time. The invoice value in the excise invoices raised by the assesse has been arrived at by multiplying the length of the pipe in meters with the above mentioned lesser Basic Rate. Further, the payment term is that 90% of invoice amount shall be paid against receipt and acceptance of coated pipe at the stock pile and that balance 10% will be paid upon lifting of coated pipes by pipeline laying contractor. This had resulted in improper representation of facts at the time of personal hearing. In order to ascertain the freight element to entertain the claim, the assesse was given several opportunities to identify the cost of transportation paid consignment-wise, as it was not feasible to apportion any part of the agreed upon contract price towards transportation. 6. The appellant then had filed written submissions explaining the differences. However though some of the consignment notes tallied, there was non-tally of some other; for exa....
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....ortation charges. They do not dispute the payment of service tax made in respect of activity of coating of pipes which falls under Business Auxiliary Services. 11. As put forward in the contentions of the appellant, the Learned Counsel Shri Raghavan Ramabhadran has strenuously explained the method by which the appellant has arrived at the portion of service tax applicable to transportation services and quantified the same to be Rs. 20,11,501/-. The objection or discrepancies pointed out by the adjudication authority in respect of basic rate has also been explained by the Counsel as shown above. We have to say that the adjudicating authority has given much effort to correlate and tally the worksheet/calculations given by appellant with the documents. The report of the Range officer was called for several times. There are series of letters issued to the appellant requesting for clarifications. The appellant has given reply to such queries. The Range officer reported that appellant had paid sum of Rs. 69,17,500/- on 30.11.2004 as service tax and that this was paid on total value of services, and the same was paid from their Cenvat account under protest. Since the Range officers verif....