TaxTMI 
TaxTMI 
2019 (4) TMI 1267
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....essee is ancillary of M/s Bharat Cooking Coal Ltd. and almost 98% of the transaction are with the Government companies. It was alleged in the show cause notice that the appellant is providing maintenance or repair service (up to 17.4.2006) and management, maintenance or repair service from 18.4.2006 by way of retreading of old and used tyre of various customers under contract but they did not pay proper service tax and also failed to file ST-3 returns to the Central Excise department. It is also alleged in the show cause notice that the appellant has obtained registration from the Department, but concealed the fact regarding provisions of the said service and the consideration raised against them. The show cause culminated into passing of the order by the lower appellate authority for the period from 16.6.2005 to 16.9.2006. Accordingly, the demand of duty of Rs. 12,09,627/-was confirmed under Section 73 (2) of Finance Act (for short 'Act') along with interest under Section 75 of the Act. Equal penalty of Rs. 12,09,627/- was also imposed on the appellant under Section 78 of the Act. The adjudicating authority has refrained from penalty under Section 76 of the Act although mentioned ....
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....eakup of material sold along with the value of material and service component of the transactions. Further at no point of time the assessee has come forward to prove that they had sufficient record indicating the quality and value of the raw material that has been consumed in the process of retreading. Therefore, it was impressed upon by the Revenue that order passed by the Commissioner (Appeals) setting aside the order of the lower adjudicating authority is incorrect and needs to be reviewed in appeal. 5. It is also on record that the same adjudication order passed by the lower adjudicating authority was also reviewed under Section 84 of the Act vide order in revision No. 5/ST/Commissioner/2011 dated 10.6.2011. The revision order was passed on the ground that the lower adjudicating authority has failed to impose penalty under Section 76 of the Act which was there in the show cause notice and, therefore, the order of the lower adjudicating authority is not correct and legal. While passing the revision order, the Commissioner has reiterated the order of the lower adjudicating authority and in addition imposed penalty under Section 76 of the said Act, @ Rs. 100/- per day till 17.4....
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....the Constitution introduced 46 amendment, 1982 empowering the State Government to enact law to artificial segregation individual contract pertaining to work, covering and higher project. In exercise of such power the concerned State Government has enacted the stated provisions for collecting Sales Tax/ VAT on the tyre retreading contract treating that as "work contract" for the purpose of levy, allowing deduction from the assessable turn over to the extent of labour charge, which is not specifically provided by the assesee was arrived notionally. In this regard, he relied on the decision of Hon'ble Apex Court in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India - 2006 (2) STR 161 (SC). In view of above such tyre retreading contract are classified in any other work contract, the levy of Service Tax/VAT could be rendered outside the scope of Article 366 (29A) and therefore illegal. It is the contention of the department however, that subject tyre retreading contract must be classified as being in relation to repair and maintenance service in entirety, and thus being subject of levy of service tax on total turn over value of the said contract. It was further contended that the ....
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....other hand, has relied upon the impugned order. He has also submitted that in case of Safety Retreading (supra), the Hon'ble Tribunal has held that assessee was not liable to pay service tax on total amount of retreading including the value of materials. However, the appellant assessee has failed to provide the documentary evidence regarding consumption of material as required under Notification No. 12/2003-ST dated 20.6.2003. Regarding the appellant assessee appeal against the review order, the ld. A.R. relied on the impugned order and stated that the lower adjudicating authority has failed to impose the penalty under Section 76 of the Act which has been rectified by the ld. Adjudicating authority. He further submitted that the review was on a different ground that is regarding escape of imposition of penalty under Section 76 of the Act and the matter before Commissioner (Appeals) against the confirmation of demand and imposition of penalty under various other provisions viz. Section 78 and 77 of the Act so there is no contradiction in the order passed by the Revisionary Authority under Section 84 of the Act. 11. Heard the parties and perused the appeal record. 12. The issue....
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....terials used in the execution of the contract of repairs and maintenance. The finding of the Appellate Tribunal that it is the entire of the gross value of the service rendered that is liable to service tax, in our considered view, does not lay down the correct proposition of law which, according to us, is that an assessee is liable to pay tax only on the service component which under the State Act has been quantified at 30%. 11. An argument has been advanced by Ms. Pinky Anand, learned Additional Solicitor General that there is no evidence forthcoming from the side of the assessee that the value of the goods or the parts used in the contract and sold to the customer amounts to seventy per cent (70%) of the value of the service rendered which is the taxable component under the State Act. The aforesaid argument overlooks certain basic features of the case, namely, the undisputed assessment of the assessee under the local Act; the case projected by the Department itself in the show cause notice; and thirdly the affidavit filed before this Court by one S. Subramanian, Commissioner of Central Excise, Salem. 12. No dispute has been raised with regard to the assessment of the appel....