Custom, Excise & Service Tax Tribunal
M/S.Hindusthan Aeronautics Ltd vs Commissioner Of Central Excise & ... on 12 March, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Sl.No.1-5) Appeal Nos.ST-241/12, 382-384/10 & 71028/13
(Arising out of Order-in-Original No.
Sl.No.1) COMMR/B-I/ST-05 & 06/2012 dated 21.02.2012
Sl.No.2-4) COMMR/BBSR-I/ST-04 to 06/2010 dated 31.08.2010
Sl.No.5) COMMR/B-I/ST-43/2012 dated 31.03/2013
passed by the Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar-I.)
FOR APPROVAL AND SIGNATURE
HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL)
HONBLE DR. I.P. LAL, MEMBER(TECHNICAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Hindusthan Aeronautics Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise & Service Tax, BBSR-I
Respondent (s)
Appearance:
Shri Gopal Agarwal, C.A. for the Appellant (s) Shri S.Sharma, Commr.(A.R.) for the Respondent (s) CORAM:
Honble Dr. D.M. Misra, Member(Judicial) Honble Dr. I.P. Lal, Member(Technical) Date of Hearing:- 12.03.2015 Date of Pronouncement :- 12.03.2015 ORDER NO.FO/75260-75264/2015 Per Dr. D.M. Misra.
1. These Appeals are filed against respective Order-in-Originals passed by the Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar-I, Orissa.
2. Briefly stated the facts of the case are that the appellant, a public sector undertaking, inter alia are engaged in the repair and overhaul of aircraft engines for aircrafts operated by Indian Air Force, Indian Navy, Indian Army, Coast Guard and others. The appellant are registered with the Service Tax department for rendering the taxable service under the category management, maintenance or repair service. In the process of rendering repair/maintenance service, the appellant also transfer/provide certain materials to their customers. The cost of the supplied materials and service charges for undertaking repairs were recovered under one single invoice. The appellant discharged service tax on the service portion as shown in their invoices, whereas no Service Tax was paid on the value of materials supplied by the appellant to the service receivers claiming the same as deemed sale, hence not includible under Notification No. 12/2003 ST dt.20.06.2003. The department has raised demand notices by including the cost of materials supplied along with service charges for computing the service tax liability denying the benefit of Notification No.12/2003 ST as no sale was effected. The demand was later confirmed by the adjudicating authority. Hence, the present Appeals.
3. The ld.C.A. for the Applicant submits that in the impugned order the benefit of Notification No.12/2003 ST was denied, inter alia, observing that the Applicant had not sold the materials supplied along with services since no applicable VAT was paid to the state government, therefore the claim of abatement for sale of such materials under Notification No.12/2003-ST dated 20.06.2003 cannot be allowed. Consequently, the value of the materials was included in the gross receipts shown in the respective invoices. The ld.C.A. further submitted that the dispute about the chargeability of local sales tax, VAT on the supplied material went up to Supreme Court and the Supreme Court by its order recording the minutes of discussion between the respective state governments and appellant by its final order dated 12.11.2013 disposed of the SLP. Pursuant to the said order the appellant had after series of meetings with Odisha state government arrived at a settlement and the appellant had discharged the settlement amount of sales tax, VAT to the state Government of Odisha. He submits that in view of the aforesaid developments, the issue of abatement under 12/03-ST dated 20.6.2003 needs to be re-examined by the adjudicating authority. He prays that the matter may be remanded to the adjudicating authority for re-consideration of the issues afresh.
4. The ld.A.R. for the revenue submits that the payment of settled VAT was not before the adjudicating authority while considering the eligibility of Notification No.12/2003 dated 20.6.2003. Hence he has no objection for remanding the case to the adjudicating authority for deciding afresh.
5. Heard both sides and perused the record. We find that undisputedly the benefit of Notification No.12/2003-ST dated 20.6.2003 had been denied to the Appellant while computing the Service Tax liability for rendering services under the category of management, maintenance or repair service during the period involved in the aforesaid appeals. We find that initially the claim of the appellant was that the supply of materials along with services involved deemed sale, hence the benefit of Notification 12/2003 ST dt. 20.06.2003 was admissible to them; the said claim was however not accepted by the Revenue in absence of actual sale of the goods supplied. On the aspect of liability of the sales tax/ VAT on the goods supplied by the Appellant, the matter went up to Honble Supreme Court and after the intervention of the Honble Supreme Court, the disputed parties, namely the appellant and the respective state governments had settled the issue. The ld.C.A. placed before us the copy of the settlement order dated 25.10.2014 passed by the Commissioner of Commercial Taxes, Odisha and submitted that pursuant to the said settlement, the Appellant had paid sales tax/VAT on the supplied material. In view of these developments, we are of the view that it is prudent to remit the case to the adjudicating authority for deciding the issue of abatement of value of the materials supplied and applicability of Notification No.12/2003-ST dated 20.6.2003 afresh. Consequently, the impugned orders are set aside and the matter is remitted to the ld. adjudicating authority for deciding the issues afresh taking into consideration the claim of the appellant about discharge of sales tax/VAT and arrive at a finding on the eligibility of Notification No.12/2003-ST dated 20.6.2003. Needless to mention a reasonable opportunity of hearing be granted to the Appellant. Both sides are at liberty to produce necessary evidences in their favour. All issues are kept open. Appeals are thus allowed by way of remand.
(Operative part of the order was pronounced in the court.) SD/ SD/ (I.P.LAL) (D.M.MISRA) MEMBER(TECHNICAL) MEMBER(JUDICIAL) sm 5 Appeal No.S.T. 241/12, 382-384/10 & 71028/13