AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 391
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....f the elevators. In case of first business model, where the appellants are engaged in both manufacture as well as undertaking the services of installation and commissioning, they discharge appropriate VAT liability on supply of the equipment and service tax on the component of installation and commissioning services. In respect of the other second model of business, the appellants are only engaged in installation and commissioning activities, on which they discharge the service tax liability under appropriate taxable entry provided under the statute. The department in this case has disputed that the appellants had not paid service tax on the gross amount of the equipment supplied as well as installed at the site of their customers. Accordingly, proceedings were initiated against the appellants, seeking confirmation of the service tax demand. The matter arising out of show cause notices were adjudicated upon by the original authority vide order dated 28.02.2014, wherein the original authority had confirmed the service tax demand on the appellants along with interest and also imposed penalties. Against the said adjudication order, the appellants have preferred appeals before the Trib....
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....n no way related to actual transaction value. (Para 13, page 48) b. VAT has not been paid by the Appellant on the actual sale value of the goods for the below-mentioned reasons: (Refer Para 20, page 50) i. There is no document evidencing the issue of VAT invoices for the sale of materials to customers. ii. The customers are not even aware of the value of individual items reportedly sold. The assigned values to individual items are known only to the Appellant and not the customers. c. Stipulation of the following conditions in the contract proves that there was no sale of goods/materials to the customers: (Refer Para 21, page 50) i. There is no separate contract for the sale of goods, indicating the details of goods sold and their value to the customers. ii. There is no document evidencing the sale of goods directly to the customers. iii. The customer is not even aware of the details of materials used since the contract is an indivisible works contract. iv. The contract mentions the specification and does not deal with the materials to be sold to the customers. v. The contract also states that packaging....
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....only be considered as the taxable value for the purpose of levy of service tax thereon. To strengthen the above stand that no service tax demand can be fastened on the appellants, learned Advocate has relied upon the following judgments delivered by the judicial forum:- i. Wipro GE Medical Systems Pvt. Ltd. vs. Commr. of S.T., Bangalore [2009 (14) STR 43 (Tri. - Bang], as upheld by the Hon'ble Supreme Court in [2012 (28) STR J44 (SC)]. ii. Safety Retreading Company (P.) Ltd. vs. Commr. Of S.T., Bangalore [2009 (14) STR 43 (Tri.-Bang], upheld by the Hon'ble Supreme Court in [2012 (28) STR J44 (SC)]. iii. M/s Johnson Lifts Pvt. Ltd. vs. Commissioner of Service Tax, Chennai 2017 (9) TMI 32- CESTAT Chennai]. iv. Commissioner of CGST & CX, Kolkata vs. Lumino Industries Ltd. [2022 (1) TMI 509 - CESTAT Kolkata]. v. Hindustan Aeronautics Ltd. vs. Commr. of Service Tax, Bangalore [2010 (17) STR 81 (Tri. - Bang)]. 4. On the other hand, learned Special Counsel appearing for the Revenue reiterated the findings recorded in the impugned order and supports confirmation of adjudged demands on the appellants. 5. Heard both sides and examined the....
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....case of provision of service for a consideration in monetary terms, the legislative mandate is to levy tax is only on the gross amount of provision of "such service". Such service specified in Section 67 provides that the service should be specific and in case of provision of that specified service, the gross amount in respect of such service alone should be leviable to service tax. On a conjoint reading of both Section 67 and Rule 2A ibid, it reveals that wherever Value Added Tax (VAT) or Sales Tax has been paid on the supply of goods, such value should be deducted for the purpose of determination of the service component, on which service tax is liable to be paid by the assessee. On perusal of the contract and other documents available in the case file, we find that the appellants had clearly demonstrated the cost of material and the element of service for both supply as well as installation of the equipment. On the basis of VAT amount paid on the supply component, the jurisdictional VAT authorities have assessed the appellant-assessee on the basis of the declarations made by them. Since, one statutory competent authority is accepting the modus operandi adopted by the appellants,....
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....h of the Tribunal that when there is clear distinction available between the sale of material and the labour charges, service tax is liable only on the labour charges and not on the material component, on which VAT has been paid by the assessee. The relevant paragraph in the said order are extracted below:- "6. [...] On the factual matrix, we find that the invoices which were produced before us clearly indicate materials charges and labour charges differently and we also find that in the very same invoices clearly indicate the discharge of Central Sales Tax as the amount of material cost. The invoices produced before us are not disputed by the Revenue. On perusal of the invoices, we find that the contention of the ld. Counsel for the appellant that they are charging for parts/materials separately and paying sales tax is correct. If that be so, we find that the decision of the Hon'ble Supreme Court in the case of M/s. BSNL (supra) will directly cover the issue in favor of the appellant as regard the non-includability of the value of the parts/materials for arriving at the correct Service Tax liability. We also find that the Principal Bench of the tribunal in the case of....