2017 (9) TMI 32

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.... on the entire product value and is liable to pay service tax at the rate of 33% on the gross amount charged. After due process of law, the original authority confirmed the demand along with interest and also imposed penalties. Hence this appeal. 2. At the time of hearing, the learned counsel Ms. D.Naveena submitted that the period involved is from 16.6.2005 to 31.7.2007. The break-up of the demand of the service tax confirmed by the authority below is as under:-   Period Gross Amount charged 33% of the Gross amount charged Rate of Service Tax Service Tax Payable Service Tax Paid Differential tax (In Rs.) 2005 06 (16.6.05 to 31.3.06) 1128718693 372477169 10.20% 37992671.2 17269396 20723275 ....

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....ermination of Value) Rules, 2006 which reads as under:- "Where Value Added Tax or sales tax, as the case may be, has been paid on the actual value of transfer of property in goods involved in the execution of the works contract, then such value adopted for the purposes of payment of Value Added Tax or sales tax, as the case may be, shall be taken as the value of transfer of property in goods involved in the execution of the said works contract for determining the value of works contract service under clause (i) " 5. She submitted that as per the above provision, as the appellant has discharged VAT/Sales Tax on 85% of the value of the contract, they are not liable to discharge service tax on the said portion again. She also relied upon....

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....sed and confirmed is legal and proper. 8. Heard both sides. 9. In the judgment of Kone Elevator India Pvt. Ltd. (supra), the Hon'ble Supreme Court has held that the service of manufacture, supply and installation of escalators/lifts is works contract service. In the case of Larsen & Toubro (supra), the Hon'ble Apex Court as held that works contract prior to 1.6.2007 are not subject to levy of service tax. Following the principles laid down in the two judgments, we hold that the demand prior to 1.6.2007 is unsustainable and therefore requires to be set aside which we hereby do. 10. As per the Table given above, a small portion of the demand pertains to 1.6.2007 to 31.7.2007. It is not disputed that the appellant have discharged serv....