TaxTMI 
TaxTMI 
2024 (10) TMI 1823
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 59 & 60/2018 dated 01.10.2018 against the confirmation of demand of Cenvat Credit for the period from July 2012 to March 2014 and the other adjudication levies. Further, Appeal No. ST/20302/2019 was filed challenging confirmation of demand of Cenvat credit against Order-in-Original No. 80/2018 dated 14.11.2018 for the period from April 2014 to September 2015. Revenue has filed Appeal Nos. ST/20153, 20155/2019, challenging the Orders-in-Original No. 59 & 60/2018 dated 14.08.2018, where the demand of service tax on 'Works Contract Service' raised by the Department was dropped by the Adjudicating authority. Further, Department filed Appeal No. ST/20344/2019 against dropping of service tax demand on the valuation issue. 3. The brief facts are the appellant is registered under various categories of service and were discharging service tax liability. They also discharged service tax liability under reverse charge mechanism (RCM). During audit, it is observed that mode of assessing the value for the payment of service tax was not in accordance with law; hence proceedings were initiated for the following omissions / violations. (i) As per the return submitted by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rules, 2004 read with section 73 (1) of Finance Act, 1994. (v) Also for the failure to file proper statutory ST-3 as required in terms of Section 77 of the Act and for availing ineligible CENVAT credit, proceedings were initiated. 4. Thereafter the Adjudicating authority as per Orders-in-Original No. 59 & 60/2018 dated 01.10.2018 held that such method of assessing the service tax is sustainable, since the Appellant have shown sufficient evidence to substantiate that the contract was separately entered and further the appellant has paid applicable VAT / Sales tax for the relevant period. However, Adjudication authority has confirmed the demand under Rule 73(1) of the Finance Act, being the CENVAT availed on ineligible input services. Similarly, Adjudication authority has issued impugned Order-in-Original No. 80/2018 dated 14.11.2018 covering the period for April, 2014 to September, 2015. Aggrieved by the said order of dropping the demand, the Department filed an appeal on the ground that actual value of the goods transferred is required to be adopted and not some notional values in terms of Service Tax (Determination of Value) Rules, 2006. Further it is contended that on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-[2017 (48) STR 97 (SC)]. 7. The Learned CA further submits that the very same Adjudication authority has made same finding in the matter of M/s. Star Worth infrastructure & Construction Ltd. and it was accepted by Review Committee of Chief Commissioners against Order- in-Original No. 26-28/2018 dated 11.01.2018. The Learned CA draws our attention to the order and submits that once the Department accepted the same finding in the case of other assessee, as a rule of consistency, should have been accepted in the case of Appellant, also. The Learned CA drew our attention to the finding in the said order where after analyzing Rule 2(A)(i) and Rule 2(A)(i)C, Adjudication Authority categorically held that the said clause only seeks to lay down that while calculating the value of property in goods transferred in a works contract, the actual value adopted for the purpose of VAT / Sales Tax needs to be taken as the value of goods for the purpose of calculating the services portion of the works contract. In the instant case, though the value of goods has been arrived at 70% on the basis of certain calculations based on averaging principles for the sake of administrative convenience (and n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner of Central Excise, Belgaum Vs. M/s. Ashok Iron Works Private Limited -2017-TIOL-3186-CESTAT- BANG ee. Nexteer Automative India Pvt. Ltd., Vs. CCE (Final Order No. 20902/2023 dated 31.08.2023 in E/20816/2022) 8. As regards the invoking the extended period in the SCN No. 100/Commr. dated 26.02.2016, Learned CA submits that it is issued for the period from July 2012 to March 2014 and entire demand against the said Show Cause Notice (SCN) is beyond the normal period. However, Adjudication Authority has not examined the various judgments of Hon'ble Supreme Court while invoking the extended period. Learned CA further submits that to invoke the extended period, there must be evidence regarding suppression of facts with an intention to evade the payment of service tax. In the present case, all the details were available in the books of account. Appellant has properly availed the CENVAT Credit. Hence, invoking of extended period without fulfilling all the conditions specified under Section 73 is not correct. Learned CA further submits that the department has not given any tangible evidence in support of their claim of suppression of facts. Merely alleged availment of CE....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that this Hon'ble Tribunal in the case of Kumar Organics Products Ltd. Vs. CCE, Bengaluru [2014 (307) E.LT. 774 (Tri. Bang.)] has held that there is no requirement under the law to intimate the Department of each and every document on the basis of which credit is taken. Department cannot allege any suppression on the part of the assessee, since ST-3 returns were filed, regularly. Hence the extended period of limitation cannot be invoked in the instant case, and the impugned order is liable to be set aside. 11. As regards the allegation of irregular availment of Cenvat credit of Rs. 6,11,27,500/- on ineligible input services, viz., Aviation services, Public road cleaning and gardening services during the period 07/2012 to 03/2014, Learned CA submits that as per show cause notice (SCN), it is alleged that the assessee availed credit on Aviation services (Chartered flight) for which only advances have been made by the assessee to M/s Sobha Purvankara Aviation Ltd., Bangalore, but there is no proof that services against such advances have been rendered by the service provider and that there is no proof that such services are consumed for providing output services. In this regar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vice Tax is liable to be paid on 40% of the total cost charged for execution of works contract. Thereby, due to adoption of wrong method of valuation, there is a short payment of Service Tax during the period 07/2012 to 03/2014, which is liable for demand and recovery in terms of Section 73(1) of the Finance Act, 1994. 15. Learned AR as regards short payment of Service Tax on interior decoration service by availing higher rate of abatement, submits that during the course of Audit, it was observed that some of the buyers of flats have entrusted the job of alteration / interior decoration work to the assessee, to be done simultaneously at the time of construction of flats. Works contract of alteration / interior decoration is carried out by the assessee on separate cost basis and not as part of construction of flats. In their ST-3 returns, assessee has mentioned such works under "Interior decoration service, and Service Tax is discharged on 25%/40% of the total consideration received for such interior decoration works. However, such interior decoration works undertaken by the assessee cannot be categorized as "Original works in terms of Rule 2A(ii)(A) of Service Tax (Determination....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as per the percentages prescribed in the Service Tax (Determination of Value) Rules, 2006. However, Adjudication Authority failed to appreciate and interpret the provision of law regarding Rule 2A(i)A of Service tax (Determination of value) Rules, 2006 and dropped the demand. Learned AR also relied on the decisions of the Tribunal in the matters of M/s. India Commercial Services Vs. Commissioner of Central Excise, Service Tax and CGST, Jaipur - [2024 (3) TMI 984 - CESTAT New Delhi] and M/s. K.S. Sharma & Decorators Vs. Commissioner of Central Tax GST Commissionerate, New Delhi - [2024 (4) TMI 72 - CESTAT New Delhi] in this regard. 19. As regards Appeal No. ST/20153/2019, Learned AR submits that the dispute is for the period from July 2012 to September 2015 and the issue is regarding irregular availment of abatement during provision of works contract service and Learned AR further submits that as per the provisions of Service Tax (Determination of Value) Rules, 2006, the actual value of goods transferred is required to be adopted. While opting for composition scheme, primary condition is that the cost of material has to be considered for payment of service tax. 20. Learned AR ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tual cost, we do not find any such actual cost analysis. Further with regard to the different percentages i.e., 25%/30% in the States of Kerala/ Karnataka, the cost of the goods / material can vary from place to place. 23. We have also considered the judgment of Hon'ble Supreme Court in the matter of M/s. Safety Retreading Co. Pvt. Ltd., (supra); where it is held that an assessee is liable to pay tax only on the service component which under the State Act has been quantified at 25 / 30%. 24. Further, we find that this Tribunal in the matter of M/s. Sobha Developers Ltd., (supra) held that; "7. The mutual exclusivity of service tax and sales tax and the powers to tax assigned by the Constitution to the States and the Centre respectively on sales and services was highlighted by the Apex Court in the Gujarat Ambuja Cements Ltd. case (supra). The taxing powers of the Centre and States assigned in the Constitution have been restated by the Apex Court in the judgments cited by SDL. The different Governments viz. Centre and States cannot intrude on the jurisdiction of each other. The decision of the Commissioner to collect service tax on the value on which the appellant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder category B of clause (ii) of this Rule and service tax should be paid on 70% of the value of the works contract. In other words, if the Revenue's argument is accepted, the appellant will have to pay service tax on 70% of the gross amount charged for the works contract and the appellant has already paid VAT on 70% of the gross amount charged as per the Tamil Nadu VAT Act. This will lead to an anomalous situation where the appellant has to pay VAT as well as service tax on 40% of the total value of the works contract." 26. We have also considered the judgment of M/s. L & T (Supra); "16. At this stage, it is important to note the scheme of taxation under our Constitution. In the lists contained in the 7th Schedule to the Constitution, taxation entries are to be found only in lists I and II. This is for the reason that in our Constitutional scheme, taxation powers of the Centre and the States are mutually exclusive. There is no concurrent power of taxation. This being the case, the moment the levy contained in a taxing statute transgresses into a prohibited exclusive field, it is liable to be struck down. In the present case, the dichotomy is between sales tax levi....