Custom, Excise & Service Tax Tribunal
Cce, Ludhiana vs M/S. J.R.Industries on 11 May, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
West Block No.2, R.K.Puram, New Delhi-110066.
Principal Bench, New Delhi.
ST/477/08
(Arising out of Order-in-Appeal No.92/CE/LDH/2008 dt.11.4.08 passed by the Commissioner(Appeals), Chandigarh)
CCE, Ludhiana Appellant
Versus
M/s. J.R.Industries Respondent
Appearance Sh. Fateh Singh, Authorised Departmental Representative(DR) For Appellant Sh. G.S.Sandhe, Adv. For Respondent Coram: Honble Mr. D.N.PANDA, JUDICIAL MEMBER Honble Mr. RAKESH KUMAR, MEMBER (TECHNICAL) Date of decision: 11.5.09 Order No._______________________ Per D.N.Panda:
This is a Revenues appeal against the impugned order passed by the Commissioner(Appeals) who held that the contract executed by the respondent was indivisible and that being composite one, is covered by the decision of the Tribunal in the case of Daelim Industrial 2006(3)STR.124(Tri.).
2. Ld. DR submits that the whole contract is composed of various activities. To support his argument he places before us a copy of work order dt.27.2.04 and prays that the order passed by the Commissioner(Appeals) may be reversed and order of the adjudication may be restored .
3. Ld. Counsel Shri G.S.Sandhe appearing for respondent brings to our notice that the amount of Rs.93,65,845/- received by the respondent was brought to tax although that was an advance paid for service to be rendered in future. Before providing service to service receipient, they were asked to pay tax. He submits that by para 4 of the SCN, Department treated advance receipts as the gross value of the service, while service was yet to be provided. The adjudication was pre-mature.
4. We are satisfied that para 4 deptics the advance payment of Rs.93,65,845/-. Ld. Adjudicating Authority noticed that Commissioning & Installation services was brought to tax w.e.f 1.7.2007. Also in terms of notification No.19/03-ST dt.21.8.03 as amended by Notification No.12/04-ST service tax was payable on 33% of the gross value received from errection, installation and commissioning service. Accordingly 33% of the amount of Rs.93,65,845/- received by the appellant was worked out to be Rs.30,90,729/-. On this amount, service tax @ 10% and education cess @ 2% thereof was charged. This exercise resulted with levy of total tax demand of Rs.3,09,072/- and education cess of Rs.6181/- respectively. He further found that the appellant was not registered for the category of errection and commission service. Such non-registration was breach of law.
5. It appears that levy was pre-mature without the service being provided. The authority below has proceeded on the conception that 33% of the advance received shall be value of taxable service. When the work order relied by the Ld. DR does not demonstrate that the receipt was the consideration for service provided, this does not provide a basis to appreciate that taxable event had arisen and levy was made properly. Once it is demonstrated by SCN that the levy was arrived treating advance receipt as measure of taxation resulting a levy of Rs.3,15,253/- , that shall not be approved to be taxed without service being provided. On the above reasoning, we dismiss the appeal of Revenue without accepting the reasoning given by the Ld. Commissioner(Appeals).
6. Accordingly, Revenues appeal is dismissed.
Order dictated in the open Court.
(D.N.Panda) Judicial Member (Rakesh Kumar) Member Technical km