2018 (6) TMI 674

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....rers of Uninterrupted Power supply System (UPS) and had units II,III & IV under the jurisdiction of the appellant department. The respondents were discharging Central Excise duty, inclusive of the value of the installation charges collected. On 5/9/2006 the department had enquired whether pre-delivery inspection charges and after sales services are included in assessable value to which respondents had replied vide their letter dated 26.9.2006 that these charges are included and also informing that their price is inclusive of installation charges of UPS. After almost two years the department issued Show Cause Notice dt.20.10.2008 to Unit III alleging that respondents are liable to discharge service tax on the installation charges for the per....

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....services provided by the provider of taxable service, whereas Excise Duty is levied on goods manufactured under Central Excise Act. Having held in the Order-in-Original that the commissioning or installation activity becomes taxable service and that the period for which Service Tax is payable is one year only under Section 73 (1) of Finance Act, 1994, there is no option available to the Adjudicating Authority other than to determine the value of taxable service and confirm the tax amount show cause notice wise as per the provisions of Finance Act, 1994 without adjusting the excise duty paid for the goods. Further, the adjudicating authority has made an observation in para 9 of the Order-in-Original that as per the judgment in the case of M/....

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....ted the service tax payable against the Central excise duty already paid by respondents. He adverted to their letter dated 29.10.2006 and submitted that appellant had clearly informed the department that they were including the charges of installation of UPS in the assessable value and were discharging the excise duty thereon. If the department had instructed that they had to pay service tax and not excise duty, the respondent would have discharged the service tax accordingly and stopped paying Central excised duty on the installation charges. After payment of Central Excise duty, the Commissioner has rightly adjusted the amount towards the service tax. The appellant has paid the differential amount of 2% as held by the Commissioner along w....

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....o suppression of facts. In the letter dated 29.10.2006, the respondents have informed the department that they are including the installation charges in the assessable value and are discharging service tax on the same. The appellants having disclosed the fact of paying excise duty on the installation charges, they cannot be saddled with guilt of suppression of facts with intent to evade payment of excise duty/service tax and we therefore find that the Commissioner has rightly set aside the demand for the extended period. 6. The main ground raised by the department is that the Commissioner ought not to have adjusted the service tax payable against the excise duty already paid. It is contended by Revenue that the service tax ought to be conf....