TaxTMI 
TaxTMI 
TaxTMI 
2025 (4) TMI 1017
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....78 of the Act. 2. Brief facts of the case are that the appellant is the holder of Service Tax Registration, under the category of "commercial Construction Service", "interior decorator service" and "Goods Transport Service". During the course of audit it was found that the appellant is undertaking orders for supplying, assembling, fixing, installation and erection of cubicles/modular furniture which falls under the category of Interior Decorator Services. It was noticed that for the period April 2006 to February 2007, the appellant has charged and collected service tax at the rate of 12.24% only on 33% of the value and had availed abatement of 67% on the realized taxable value of interior decorator services. Noting that the value to be adopted under Section 67 of the Act was the gross amount charged by the service provider for such service rendered, the Department was of the view that that the appellant had to discharge service tax on the 67% of the income the appellant has received as consideration and which the appellant had claimed as abatement. It was found that such non computing of the service tax on the gross amount received by the appellant has resulted in short payment of....
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....ther or not the cost of materials sold while rendering of service should also be computed while arriving at the value for the services rendered in terms of Section 67 of the Act. Admittedly there is no dispute on the factum of supply of goods as borne out from paragraph 7.3.2 to 7.3.3 of the OIO and the CA certificate submitted also confirmed the fact of payment of VAT for the supplied goods. AS such, when the issue involved is one of interpretation, longer period of limitation cannot be invoked. He places reliance on the decision of the Honourable Apex Court in Uniworth Textiles Ltd, 2013 (1) TMI 616 SC. 5. The Ld. Counsel would also rely on the decision of the Hon'ble Supreme Court in CCE v Larsen and Toubro, reported in 2015(8) TMI 749 to substantiate his contention that the settled position of law that evolved with respect of levy of service tax on works contract from 01.06.2007 was that any indivisible contracts involving supply of goods and labour is not taxable under Finance Act, 1994 prior to 01.06.2007 and inasmuch as the period involved herein is prior to 01.06.2007, the finding in the impugned OIO as upheld in the OIA as to the taxability of the entire value as taxable ....
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....assembling, fixing, installation and erection of cubicles/modular furniture. The appellants were charging and collecting service tax only on 33% of the value and have paid service tax under the category of "Interior Decorator" service. The activity of the appellant was regarded under the TNGST Act as "works contract" and the appellant were discharging their sales tax liabilities. In reply to the SCN the appellant had contested the demand also stating that the work undertaken was in the nature of "Execution of Works Contract" which is a taxable service only with effect from 01-06-2007, but nevertheless sought the benefit of notification No.12/2003 ST dated 20.06.2003 so far as the cost/value of the goods sold during the course of the execution of works contract. It is pertinent that the nature of the appellant's activities as a composite works contract was not disputed and in principle the adjudicating authority had also acceded to the appellant's contention that levy of service tax cannot be made on the cost of materials which ought to be excluded from the taxable value. However, the benefit of Notification No.12/2003-ST dated 20.06.2003 otherwise claimed was denied by both the low....
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....ue of property in goods transferred in the execution of a works contract." (emphasis supplied) 15. It is also seen that subsequently, the Honourable Supreme Court in a case reported as Total Environment Building Systems Pvt Ltd v. Deputy Commissioner of Commercial Taxes, 2022 (63) GSTL 257 (SC), was seized of the question ""whether, service tax could be levied on Composite Works Contract prior to the introduction of the Finance Act, 2007, by which the Finance Act, 1994 came to be amended to introduce Section 65(105)(zzzza) pertaining to Works Contract?" in a number of Appeals that was being heard. Learned Additional Solicitor General, appearing on behalf of the Revenue, also prayed that the decision in the case of Commissioner, Central Excise and Customs, Kerala v. Larsen and Toubro Limited, (2016) 1 SCC 170, which was also cited supra, may be reconsidered. The Hon'ble Supreme Court while negativing the prayer, in para 12 therein held as under: " 12.. Therefore, on the principle of stare decisis, we are of the firm view that the judgment of this Court in the case of Larsen and Toubro Limited (supra), neither needs to be revisited, nor referred to a Larger Bench of this Court as ....
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....r partially, only when there is any "taxable service" as defined in sub-clauses of clause (105) of Section 65 of the Finance Act, 1994 and not otherwise. This Court agreed with the view taken by the Full Bench of the CESTAT in the judgment dated 6-9-2013 and dismissed the appeals of the Revenue. 26. Therefore, reliance placed by the assessees in the present case on the aforesaid judgments is just and proper. On the other hand, the contention of Ms. Diwan, Learned ASG to the effect that even prior to the aforesaid amendment being made to the Finance Act, 1994 service tax on works contract was leviable is not correct. It was being levied on purely service contract and not on service element of works contract as there was no definition of a works contract till then. Hence, the amendment made to the Finance Act, 1994 by insertion of the definition of works contract as under clause (zzzza) is not clarificatory in nature. Having found that the Service Tax was not at all leviable on service element of a works contract, Parliament felt the need for the amendment and was so incorporated by the Finance Act, 2007. 27. Thus, the judgment in Larsen and Toubro Ltd. (supra) has been correctly....
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....ice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11A(1) of the Act." (emphasis supplied). 18. Similar view have been taken in the decision in CCE & ST v Triveni Engineering & Industries Ltd, 2015 (317) ELT 408 (All). It is also settled that Department cannot travel beyond show cause notice. CCE Mumbai v. Toyo Engineering India Ltd, 2006(201) ELT 513 (SC) refers. Further, in Uniworth Textiles Ltd v CCE, Raipur, 2013 (288) ELT 161 (SC), the Apex Court has held that it is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. The Apex Court went on to cite its observation in Union of India v. Ashok Kumar & Ors. - (2005) 8 SCC 760 that "it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility." 19. Thus, the findings of both the lower authorities that the appellant had the intention to evade service tax is sans any basis as there is no evidence let in of any....