Custom, Excise & Service Tax Tribunal
Kone Elevators India Pvt. Ltd vs Commissioner Of Service Tax, Chennai on 3 November, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No.ST/179/2006 [Arising out of Revision Order-in-Original No.3/2006 dt. 4.5.2006 passed by the Commissioner of Service Tax, Chennai] Kone Elevators India Pvt. Ltd. Appellant Versus Commissioner of Service Tax, Chennai Respondent
Appeal No.ST/174/2007 [Arising out of Order-in-Appeal No.20/2007 (M-ST) dt. 28.5.2007 passed by the Commissioner of Central Excise (Appeals), Chennai] Kone Elevators India Pvt. Ltd. Appellant Versus Commissioner of Service Tax, Chennai Respondent Appearance:
Shri S. Shivathanu Mohan, Advocate For the Appellant Shri B. Balamurugan, AC (AR) For the Respondent CORAM :
Honble Shri D.N. Panda, Judicial Member Hon'ble Shri Madhu Mohan Damodhar, Technical Member Date of hearing / decision : 3.11.2016 FINAL ORDER No.42229-42230/2016 Per D.N. Panda Appeal No.S/179/2006 Appellant says that when it claimed abatement under Notification No.12/2003 dt. 20.6.2003 before the Adjudicating Authority to exempt goods used in the works contract from the purview of the service tax and that authority granted relief of Rs.18,52,663/- vide OIO No.42/2004 dt. 23.6.2004, suo motu proceeding was initiated by revisional authority who reviewed the said OIO and reversed that and demanded service tax on the materials used in the contracts.
2. Ld. counsel says that value of the goods used in the maintenance contract is workable from the documents given in page 100 of the appeal folder and that is not be liable to service tax.
But Revenue contends that entire gross value of the contract is liable to service tax. Also abatement claimed is not permissible to the appellant which did not provide any basis for examination.
4. Law is well settled that Finance Act, 1944 is not commodity taxation law. When the appellant submitted respective documents in support of its claim as per page 100 of the appeal folder in Appeal S/179/2006, it cannot be said that appellant has not provided any evidence to support its claim. While Adjudicating Authority has examined use of the material in performance of the maintenance contract and his order does not suffer from any legal infirmity, order of the learned Commissioner does not show any good reason why he disturbed the order of adjudication without examining the details provided by appellant and available on record. Therefore there is no reason to maintain the order of learned Commissioner but to set aside the same and uphold the adjudication order. Appeal is accordingly allowed.
Appeal No.S/174/2007
5. In the present case, if the details of goods used in contract are provided by appellant, that deserves examination to ascertain whether the contract involved supply of spare parts/components for the purpose of maintenance. Both sides shall co-operate with the adjudicating authority and work out the value thereof. Once the authority is satisfied that there was use of spare parts/components and value thereof is ascertainable, such value shall not be liable to service tax.
6. The authority is required to appreciate the ratio laid down by Apex Court in the case of Imagic Creative Pvt. Ltd. Vs Commissioner of Commercial Taxes - 2008 (9) STR 337 (SC) and shall pass appropriate order without taxing any value of the goods used in the execution of the contract.
7. In the result, this appeal is remanded to the Adjudicating Authority to examine and determine the value of material used in the contract and grant exemption thereof from taxation.
(Dictated and pronounced in open court)
(MADHU MOHAN DAMODHAR) (D.N.PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
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