TaxTMI 
TaxTMI 
2023 (1) TMI 690
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....wrongly availing abatement of 67% for calculating the taxable value for payment of service tax as per the provisions of Notification No. 1/2006-ST dated 01.03.2006 as amended. On this basis inquiry was initiated and documents were scrutinized. On study of work orders and its related invoices pertaining to thermal insulation, it was found that the scope of work of the contract executed by the Appellant are (i) Hot insulation including supply of LRB and Aluminium Sheet (ii) Cold Insulation with Thermocol and Aluminium Sheets (iii) Insulation of pipeline with black superioan sleeve providing and fixing of black superioan sleeve with cellotape (iv) Insulation with black nitrite rubber foam, sheet, etc.. It appeared that the service provided by ....
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....luminium Sheet (ii) Cold insulation with Thermocol and Aluminium Sheet (iii) Insulation of Pipeline with black superion sleeve providing and fixing of black superion with cellotape (iv) insulation with black nitrile rubber foam, sheet, etc. were being supplied and applied on the equipment, structures etc. The sale price of the material was not being separately shown in the invoice, however, substantial VAT/Sales Tax under appropriate scheme and at appropriate rates were paid. In fact, the approx.. involvement of material in the work undertaken is about 70% of the total cost. There is no dispute over this fact, and this was also specifically mentioned in the statements of Shri Viral Pandya (Proprietor) recorded in the course of the investiga....
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....ing the composite service, and the material component involved therein was approx.. 70% and at the most service tax was to be paid only on 30% of the value, which represent labour component. As against this, the appellant has paid service tax on 33% of the value, which is more than the actual liability. The basic idea behind giving abatement is to ensure that Service tax is not charged on that value of materials, which are used together with labour while providing taxable service. Service tax is a tax on services and not on goods and thus such abatement are given. 3.4 As regards the second issue "works contract service' which is made liable to levy of service tax w.e.f. 01.06.07, he submits that the work undertaken for the clients, which....
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....• SOBHA DEVELOPERS LTD.- 2010(19)STR 75 • HINDUSTAN AERONAUTICS LTD.- 2010(17)STR 249 3.6 He also submits that in the present matter benefit of "cum-tax" value was not given to the Appellant which is otherwise available as per law. 04. Per contra, Shri Rajesh Agarwal, departmental authorised representative relies on the findings in the impugned order. 05. Heard both sides and perused the records. The first issue involved in the present appeal for determination is whether the appellant are eligible to the benefit of Notification No. 1/2006-S.T., dated 1-3-2006. The relevant entry specified in said notification reads as follows : S. No. Sub-clause of clause (105) of Section 65 Description of taxable servic....
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....ning and installation agency, during the course of providing erection, commissioning or installation service". Hence, in our opinion, it cannot be considered that the said entry is applicable only on the supply of plant, machinery or equipment or structures. Besides, it is also applicable on any other material soLearned In the present matter there is no dispute on the facts that the Appellant is Commissioning and Installation agency and for providing the taxable services appellant has provided the thermal insulating materials i.e. Hot insulation including supply of LRB and Aluminium Sheet, Cold insulation with Thermocol and Aluminium Sheet, Insulation of Pipeline with black superion sleeve providing and fixing of black superion with cellota....
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.... (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completio....