TaxTMI 
TaxTMI 
2024 (12) TMI 1136
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....entral excise duty on the entire value of the machines which included the charges pertaining to erection, installation and commissioning at the buyer's premises were also included in the assessable value of 'Draw Texturising Machines' cleared by them to their buyers. Following three show cause notices came to be issued. Sr No. SCN F. No. & Period Covered Date Amount of S. Tax demanded under Section 73 of FA 1994 Penalty proposed on assessee under:- Demanded under Personal penalty if any 1 2 3 4 5 6 7 1 Ch. (84) 3-52/ST/2008 02.12.2008 7,20,88,248/- Section 76,77 & 78 of FA, 1994 Proviso to Section 73 of FA, 1994 Yes, under section 76,77 & 78 of FA, 1994 on Shri Babubhai N Bhagat, Partner 2 V(Ch.84) 3-79/Dem/08 (Apr-08 to Feb-09) 23.03.2009 90,95,623/- Section 76,77, & 78 of FA, 1994 Proviso to Section 73 of FA, 1994 No 3 V(Ch.84) 3- 34/ST/Dem/09-10 (March-09) 17.03.2010 37,01,375/- Section 76,7....
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....ords of the appeal. We are of the view that the similar matter has already been decided by this tribunal in case of CCE & ST Silvasa Vs. Aalidhare Taxtile Pvt Ltd reported under 2022 (12) TMI 11 CESTAT-Ahmedabad and therefore the matter is no longer res-integra. The relevant extract of the above mentioned decision in case of Alidhara Taxpin Enginners Pvt Ltd (supra) is reproduced here below:- "8. We have considered the submissions made by both the sides and have gone through the impugned order. Some of the undisputed facts in the present case are that, appellants are primarily and mainly engaged in the manufacture of textile machinery. A contract entered into by them with their buyers for a lump sum amount and the sale price is inclusive of installation and commissioning charges. It is also not disputed that appellants have paid the Central Excise duty on the complete value and have not claimed any deduction on account of installation and commissioning charges. In fact, no segregated amount stands arrived at in the contract towards the installation or commissioning charges. This is also undisputed that the appellants have availed the services of sub-contractors in respect ....
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....appellant is not an agency engaged in providing services of Installation, erection and commissioning etc. They are essentially a manufacturing unit engaged in the manufacture of textile machinery, which is undertaken to be supplied to their customer in a fully commissioned state. 10. Tribunal in the case of Allengers Medical Systems Limited v. Commissioner of Central Excise, Chandigarh - 2009 (14) S.T.R. 235 (Tri.-Del.) in an identical set of facts and circumstances has observed that where the assessee is paying Central Excise duty on the manufacture and sale of medical equipments on the total value recovered by them from their customers and where the activities of erection, commissioning and installation of equipments is a part of sale of excisable goods and where there is no separate charging for erection and commissioning of equipments, levy of service tax on such activities cannot be held to be proper and legal. The Tribunal held that activity of installation, erection and commissioning was incidental to the deliver of goods to the customers and as such, no service tax can be confirmed against the appellants. 11. Learned advocate has also drawn our attention t....
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....he natural conclusion that would emerge is that the processes undertaken in the buyer's premises are actually incidental to manufacturing activity undertaken in the manufacturer's premises. What has been sold in this case is the complete machine duly erected and commissioned' and operational. The incidental process of erection and commissioning being incidental to manufacture, has to be treated as continuation of the earlier process which started in the manufacturer's premises. In this case even though the position of the machine in CKD condition gets transferred to the buyer when it is removed from the factory as per the contract, the question to be examined is whether such a service is related directly or indirectly to the manufacture of their goods in question. As already mentioned by me earlier, the process of erection and commissioning at the buyer's premises is incidental to the manufacture of the machine and therefore the erection and commissioning services provided also can be said to be in relation to the manufacture, since the process in this case is complete only after the erection and commissioning takes place." The above observation made by the Tribunal, even ....
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.... hold that appellants were not liable to pay any service tax. Accordingly, the impugned order confirming the demand and imposing penalties upon them is set-aside and appeal is allowed with consequential relief. Inasmuch as we have allowed the appeal on mere, the issue of demand being barred by limitation is only of academic interest and its not being gone into. M/s. Allengers Medical Systems Ltd.- 2012 (277) ELT 184 (Tri.-Del.) 4. After hearing both the sides and on perusal of the record, it is seen that the representative of the appellants in his statement dated 13th October, 2005 stated that OBDI contained the total cost of equipment including the cost of machine and value of optional services such as erection and commissioning of machines and equipment sold by them. In reply to show cause notice, the appellants contended that they had been paying duty on the total invoice value of medical equipment charged from the customers, which establishes the activity of installation, commissioning or erection had been considered as part of sale. On perusal of the copy of the Central Excise invoice and the Annexure VI to the show cause notice, we find that the demand of ta....
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....vant portion of the decision of the Hon'ble Supreme court in the case of Kone Elevators (I) Ltd. supra is reproduced below : "It can be treated as well settled that there is no standard formula by which one can distinguish a 'contract for sale' from a 'works contract'. The question is largely one of fact depending upon the terms of the contract including the nature of the obligations to be discharged there under and the surrounding circumstances. If the intention is to transfer for a price a chattel in which the transferee had no previous properly, then the contract is a contact for sale. Ultimately, the true effect of an accretion made pursuant to a contract has to be judged not by artificial rules but from the intention of the parties to the contract. In a 'contract of sale', the main object is the transfer of property and delivery of possession of the property, whereas the main object in a 'contract for work' is not the transfer of the property but is one for work and labour. Another test often to be applied to is: when and how the property of the dealer in such a transaction passes to be customer is it by transfer at the time of delivery of the finished article as a ch....
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....ective parameters on service tax and the sales tax as envisaged in a composite contract, from an indivisible contract levy would be determined. 9. We find that in the instant case, the appellant engaged on business of manufacturer and sale of medical equipment and no separate contract for erection and installation of the medical equipments. The erection and installation charges are covered in the value of the medical equipments and the central excise duty was discharged thereon. So, the case laws relied upon by the learned DR are not applicable herein. 10. In view of the above discussion, we find that the demand of tax and penalties are not sustainable. Accordingly the impugned order is set aside. The appeal is allowed with consequential relief. M/s. Rahil Air Bubbles Pvt. Ltd.- Final Order No. A/11894/2019 dated 17.09.2019. 4. We have carefully considered the submission made by both sides and perused the records. We find that the entire transaction is of purchase of imported bubble wrap machines. The appellants have discharged custom duty considering the total value of machine shown in the invoice. There is no separate charge for service such ar....
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....contracts are not liable to service tax under the category of 'works contract service' prior to 01.06.2007 as held by the Hon'ble Supreme Court in Larsen & Tubro Ltd. 2015 (39) STR 913 (SC). 8. Considering the need for verifying all the factual details and non-consideration of facts placed by the appellant at the 5 ST/186/2012-ST [DB] time of original decision, we find it fit and proper to remand the case to the original authority for a fresh decision. Since the matter is remanded, all other issues are kept open including the question of time bar raised by the appellant. Accordingly, the appeal is allowed by way of remand." From the above judgment, which is relied upon various decisions of this Tribunal where it was held that in case of import of machine including the erection and installation, it is not permissible to artificially bifurcate the service value from the total value. Accordingly, no Service Tax can be demanded for such import. Being an identical issue and the facts involving in the present case, it is squarely covered by the judgment of Bhavik Terryab (supra). Following the ratio of the said decision, we set aside the impugned order and allow the app....