Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S Sharma And Associates Firetech P. ... on 20 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 20/09/2016. DATE OF DECISION : 20/09/2016. Service Tax C.O. Application No. 3 of 2011 in Appeal No. 562 of 2010 [Arising out of the Order-in-Appeal No. IND-I/38/2010 dated 29/01/2010 passed by The Commissioner (Appeals-I), Customs & Central Excise, Indore.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? CCE, Indore Appellant Versus M/s Sharma and Associates Firetech P. Ltd. Respondent
Appearance Ms. Neha Garg, Authorized Representative (DR) for the appellant.
Shri Pankaj Sethi, C.A. for the Respondent.
CORAM :Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Final Order No. 53718/2016 Dated : 20/09/2016 Per. Archana Wadhwa :-
Being aggrieved with the order passed by Commissioner (Appeals) Revenue has filed the present appeal.
2. We have heard Ms. Neha Garg, learned DR for the Revenue and Shri Pankaj Sethi, learned Consultant for the respondent.
3. As per facts on record the assessee were placed with a purchase order by M/s Kurlon, Malanpur for supply of Fire Hydrant System totaling amounting to Rs. 25,76,925/-, vide purchase order dated 20th June, 2007. The said goods were supplied by the respondent under the cover of invoices dated 27th December 2007.
4. Revenue was of the view that the appellants have undertaken the installation of the said Fire Hydrant System and as such they are liable to pay service tax to the tune of Rs. 1,10,424/-. On indicating the same to the assessee, they deposited the tax alongwith interest vide challan dated 20th August 2008 and also filed a refund claim subsequently on the ground that no services stand provided by them and the entire purchase order was only for supply of Fire Hydrant System for itemized details of materials to be delivered. They also took a categorical stand that they have paid VAT on the entire sale value of the goods and no consideration stands received by them their from buyers towards the installation activities.
5. The original Adjudicating Authority, did not find favour with the above stand of the assessee and vide his order-in-original dated 06/8/09, rejected the refund claim. On appeal, Commissioner (Appeals) examined the entire purchase order as also the invoice raised by the respondent and observed that the sales tax has been paid by the assessee on the total amounts of the invoice clearly establishing that no services have been rendered by them. In as much as the deposits were made by the assessee under the pressure of the Revenue, they had to be granted refund. He also observed that the demand was made by the Department under the cover of letter dated 30/7/08 referring to a non-existent entry installation of Fire Hydrant System services which is not a specified service under Section 65 (105) of the Finance Act, 1994. He accordingly allowed the appeal.
6. Being aggrieved with the said order, Revenue has preferred the present appeal.
7. During the course of arguments, learned DR appearing for the Revenue has drawn our attention to the various clauses of the contract in support of her argument that the assessee also undertook the work of installation and commissioning. The fact that the VAT has been paid on the entire contract value is no ground for holding that services were not provided by the assessee, as has been held by the Honble Supreme Court in the case of Idea Mobile.
8. We have gone through the entire purchase order and the various clauses to which our attention stands drawn. There is no clause directly on the issue, requiring the assessee to do the installation and commissioning of the Fire Hydrant System. The various clauses are only to the effect that after the delivery of the goods, the respondent has to depute competent technical people for assembly, erection and commissioning and if the assessee is not available during the commissioning etc. there is a penalty clause.
9. Learned Advocate explains that in as much as the goods supplied by them are of technical nature, the assistance of the supplier was sought for installing the same. The various clauses referred to by the learned DR only refers to the presence of the assessees technical persons, during the course of erection and commissioning. There is no direct clause in the purchase order requiring the assessee to do the erection and commissioning and no separate consideration for the same stand paid.
Alternatively learned Advocate has submits that in terms of Notification No. 12/2003 dated 20th June, 2003, the value of the goods supplied during the course of providing any service has to be deducted from the value of the services, if any. The total consideration received by them from the service recipient is to the tune of Rs. 25,76,925/- and the total value of the material/ goods sold, in terms of the invoice raised by them is also to the tune of Rs. 25,76,925/-. As such, the value of the services, if any is nil and in the absence of any consideration received for the value of services allegedly provided by them, no service tax can be confirmed.
10. We, find that the Tribunal in the case of Allengers Medical Systems Ltd. vs. CCE, Chandigarh reported in 2009 (14) S.T.R. 235 (Tri. Del.) has observed that where a person sells the goods and erection, commissioning and installation of the said sold equipments is treated as a part of the sale of excisable goods and when there is no evidence to show charging of paid amounts for erection and commissioning, such activities have to be held as incidental to delivery of goods to the customers. Admittedly in the present case, the appellant has paid sales tax on the entire value of the goods sold by them and the invoice raised by them also reveals only the sale of goods. As already observed, in the purchase order also the reference is only to supply of goods and no part of the contract, requires the assessee to undertake the job of erection and commissioning etc. No value of the said services stand separately mentioned in the purchase order.
We also find favour in the assessees contention that in terms of Notification No. 12/2003-ST, the value of the goods has to be taken out for the purpose of arriving at the value of services, if any. If the entire value of the goods stands taken out from the total contract value, nothing survives for the services, alleged to be supplied by the assessee. As such, we find no infirmity in the views adopted by Commissioner (Appeals), requiring any interference by the Tribunal. Accordingly the appeal filed by the Revenue is rejected.
(Operative part of the order pronounced in the open court.) (Archana Wadhwa) Member (Judicial) (V. Padmanabhan) Member (Technical) PK ??
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