2025 (7) TMI 2030

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....ice tax by doing artificial bifurcation of the cost of material and service portion in works contract service. Alleging that the respondent who had carried out works contract service failed to pay appropriate service tax under works contract service and also failed to pay service tax on Reverse Charge Mechanism (RCM) basis on Transport of Goods by Road service, proceedings were initiated and show-cause notice was issued on 12.12.2014 for the period from April 2012 to December 2012. During investigation, the respondent submitted that for the relevant period from July 2012 to December 2012, they have admitted short payment of Rs.18,61,096/- which was subsequently paid and opted for Voluntary Compliance Encouragement Scheme (VCES) Declaration.....

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....) for the Revenue reiterated the findings in the Review Order and also drew our attention to Notification No.11/2012-ST dated 17.03.2012 and submitted that as per Rule 2A, the method of valuation adopted by the respondent is unsustainable since it is not reflecting the actual value of the goods involved in execution of works contract. Learned Authorized Representative (AR) further submits that as per the evidence on record, it is and admitted fact that for payment of VAT, appellants were assessed under Compounded Scheme and are receiving the work orders on all-inclusive rate. Learned Authorized Representative (AR) also drew our attention to the invoice reproduced in the Order-In-Original and submits that from the said invoice, it is evident....

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.... on VAT returns to establish the veracity of the claim. 4. Learned counsel for the respondent drew our attention to the grounds in the impugned Order-in-Original and also to Rule 2A of the Service Tax (Determination of Value) Rules, 2006 and submitted that once the assesee has maintained proper accounts regarding value of service as well as materials used in the works contract service and also when VAT is paid on the goods / material used in works contract service, demand proposed in the show-cause notice is unsustainable. Learned counsel also drew our attention to the judgment of the Hon'ble Supreme Court in the matter of L & T and large number of decisions including the decision of the Tribunal in the matter of Commissioner of Service ....