TaxTMI 
TaxTMI 
2018 (6) TMI 673
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....ss Account and has considered 33% as the assessable value; Service tax of Rs. 32,55,59,045 has been demanded in the SCN. SCN also proposed to disallow Cenvat credit of Rs. 85,57,851/- on the ground that in terms of notification no.1/2006, the benefit was available only where Cenvat credit is not availed. Vide OIO No.71/2008 dated 31.12.2008, Commissioner Service Tax, confirmed demand for Service Tax of Rs. 32.56 Crores along with interest for the Period 1/7/2003 to 31/3/2007; appropriated an amount of Rs. 19.55 Lakhs and denied Cenvat Credit of Rs. 85.58 Lakhs and imposed a penalty of Rs. 32.56 Crores plus Rs. 85.58 Lakhs against the appellants. Hence the appeal No. ST/281/2009. 2. The appellants are engaged in manufacture and sale of ACSR conductors and other related products; they are also undertaking projects for laying of transmission cables/lines, supply, erection, commissioning and installation of transmission towers, transformers and ETV meters etc. for state owned electricity companies, on turnkey basis; Various State Electricity Boards have awarded contracts to the appellant for supply of such Conductors and other associated equipment and materials and erection, commiss....
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....) (zzh), 65(105) (zzq) and 65(105) (zzzh) were not sufficient for levying service tax on indivisible composite works contract prior to 01.06.2007. The Hon'ble Supreme Court has considered the whole scheme of taxation of services and came to the conclusion that the above taxable services would refer only to pure service contracts and a composite contract can be subjected to levy of service only from 01.06.2007 under works contract service, as the legislative mechanism to determine the value of service element in the composite contract, was introduced for the first time, only with effect from 01.06.2007 under works contract service. Further, various exemption notifications, providing for abatements, cannot come in aid to levy service tax on composite contracts prior to 01.06.2007, as the validity of a levy cannot depend upon the existence of exemption notifications issued by the executive. The said decision of the Hon'ble Supreme Court has been followed in a catena of cases. The appellant wishes to rely on the following decisions wherein the SC decision has been followed in support of their contention. (i) Balaji Builders v. CCE, Jaipur reported in 2017 (6) GSTL 59 (Tri-Del)....
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....applying the composition scheme, without including the value of Supply Contract was held to be in order. 3. The appellant further submits that the Notification No.45/2010 ST dated 20.07.2010 services relating to transmission and distribution of electricity, were given retrospective exemption up to 26.02.2010 / 21.06.2010 (from these dates, prospective exemption has been extended vide Notifications No.11/2010 and No.32/2010), under Section 11C of the CE Act, as made applicable to service tax. In the instant case, the activities undertaken by the appellant are for laying of power transmission lines, power distribution lines and other associated works like substation construction, etc. for the State Electricity undertakings, which is directly pertaining to transmission and distribution of power and hence the benefit of above exemption is available and for this reason also the demand of service tax is not sustainable. The appellant wishes to rely on the following decisions in support of their contentions above. * Pioneer Builders Vs CCE - 2017-TIOL-3493-CESTAT Hyd. * CCST, Hyderabad v. Sri Rajyalakshmi Cement Products reported in 2017 (52) STR 309 (Hyd) ....
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.... appellant also wish to submit that in the show cause notice, the demand of service tax has been made on the total value, i.e. value of supply and value of service, after allowing 67% abatement under Notifications No.19/2003 and No.1/2006. 6. The appellant submits that in this connection, there is an allegation of wrong availment of Cenvat credit in the SCN of Rs. 85,57,851/-. This allegation has been made on the ground that Cenvat credit on input services cannot be availed if benefit of Notification No.1/2006 ST is claimed. In this regard, the appellant submits that as per Notification No.19/2003 which was in force up to 28.02.2006, availment of input service credit is not barred. Only under Notification No.1/2006 the same was barred. The entire credit has been availed by the appellant prior to 01.03.2006 and hence the demand confirmed on the appellant in this regard is not at all sustainable and if any credit has been availed after 01.03.2006 the same is not entitled, if the demand is quantified under Notification No.1/2006. But if the alternative claim of the appellant for the benefit of Notification No.12/2003 is extended, the appellant is entitled for credit, as the credit ....
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....instant case, since admittedly, for each service rendered, the price is indicated and the gross income from service rendered is available in respect of each contract, it cannot be regarded as a 'composite and indivisible' contract. Hence, the submission that no Service Tax is chargeable on the services rendered by the appellant is devoid of merits. Further, the appellant paid S Tax after deducting 67 % from the full value of the services rendered without any authority of law. 7.2. Raising a debit of Rs. 85.57 Lakhs out of credit purportedly taken on capital goods as if they were working under Notification 12/03 is not tenable. First of all, taking such credit was itself irregular as they claimed to be working under Notification No.19/03; secondly, credit was taken only after investigations began. The appellant deliberately changed the invoice dates to certain earlier dates, when the appellant's activities were not covered under the taxable category. Appellant's explanation in this regard is an afterthought. Invoking of extended period is therefore justified. 7.3. On the question of applicability of Notification No. 45/2010 ST dated 20/7/2010, the Learned....
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....uch contracts liable to service tax under Section 65(105) of Finance Act, 1994 had levied service tax only on contracts simpliciter and not composite individual works contracts. There was no charging section specifically levying service tax only on works contract. It is to be noted that Hon'ble Supreme Court while saying that as there was no levy of service tax on composite work contracts prior to 1.6.2007 have also clearly enunciated that such contracts should not only be works contract but also indivisible. In the instant case, the contracts entered into are though apparently composite contracts but are not indivisible. 8.2. We find that the learned Commissioner has given a finding that it is clearly mentioned that the contract is on turnkey basis and supply of material and goods are integral part of the contract; hence, the same is split into two viz., service contract and supply contract. It remains that they are part of single contract; accordingly, for the purpose of valuation, for determining the gross value in terms of Notification No.19/2003- ST read with Section 67, it remains as a single contract and thus, the cost of materials/goods supplied/sold agai....
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.... regarding levy of service tax (including non-levy thereof), under section 66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as 'the Finance Act'), on all taxable services relating to transmission and distribution of electricity provided by a person (hereinafter called 'the service provider') to any other person (hereinafter called 'the service receiver'), and that all such services were liable to service tax under the said Finance Act, which were not being levied according to the said practice during the period up to 26th day of February, 2010 for all taxable services relating to transmission of electricity, and the period up to 21st day of June, 2010 for all taxable services relating to distribution of electricity; Now, therefore, in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the said Finance Act, the Central Government hereby directs that the service tax payable on said taxable services relating to transmission and distribution of electricity provided by the service provider to the service receiver, which was not being levied in accordance with the said practice, shall ....