Custom, Excise & Service Tax Tribunal
M/S. Mil Industries Ltd vs Cst, Chennai on 1 January, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
ST/S/191, 192/2012 & ST/260, 261/2012
(Arising out of Order-in-Original Nos.69 & 70/2011 dated 30.11.2011, passed by the Commissioner of Service Tax, Chennai).
For approval and signature
Honble Shri P.K. DAS, Judicial Member
Honble Shri MATHEW JOHN, Technical Member
________________________________________________________
1. Whether Press Reporters may be allowed to see the : Yes
order for Publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair : Seen
copy of the Order.
4. Whether order is to be circulated to the : Yes
Departmental Authorities? ________________________________________________________
M/s. MIL Industries Ltd. : Appellants
Vs.
CST, Chennai : Respondent
Appearance Shri S. Muthuvenkataraman, Adv, for the appellants Shri Ram Mohan Rao, DC (AR), for the respondents CORAM Honble Shri P.K. Das, Judicial Member Honble Shri Mathew John, Technical Member Date of Hearing : 01.01.2014 Date of Decision: 01.01.2014 FINAL ORDER No.40091-40092/2014 Per: P.K. Das Both the appeals are arising out of common order and therefore taken up together for disposal. After hearing the stay petition at length, we find that the appeals can be decided at this stage. Accordingly, after disposing the stay petitions, we take up the appeals for hearing.
2. Heard both sides and perused the records.
3. Tax was demanded under the category Maintenance and Repairs Service for the period from October, 2004 to March, 2010. The appellants are engaged in the manufacture of rubber lined goods. Apart from that, they undertake the process of rubber lining of steel tanks/vessels, steel pipes/fittings/flanges etc. supplied by the customers. In some cases the appellant rendered similar services at the customers premises. In both the cases, the appellants paid service tax on the labour charges. The dispute relates to the demand of tax on material portion.
4. The Ld. Advocate on behalf of the appellants submits that the Honble Delhi High Court in the recent decision in the case of G.D. Builders Vs. UOI 2013 (32) STR 673 (Del.), held that no tax is leviable on the material portion.
5. On the other hand, the Ld. Authorized Representative on behalf of the Revenue drew the attention of the Bench to the relevant portion of the adjudication order in so far as invoice No. 510 dated 02.03.2008, was raised to M/s. Coromandel Fertilizers Ltd., showing the entire cost of service without bifurcating the material portion. He submits that the Larger Bench of the Tribunal in the case of Aggarwal Colour Advance Photo System reported in 2011 (23) STR 608 (Tri.-LB), held in favour of the Revenue.
6. After hearing both sides and on perusal of records, we find that the Honble High Court of Delhi, in the case of G.D. Builders (supra) held as under:-
(1) After 46th Amendment to the Constitution, composite contracts can be bifurcated to compute value of the goods sold/supplied in contracts for construction of buildings with labour and material. The service portion of the composite contracts can be made subject matter of service tax. Aspect doctrine is applied for bifurcating/vivisect the composite contract.
(2) Service tax can be levied on the service component of any contract involving service with sale of goods etc. Computation of service component is a matter of detail and not a matter relating to validity of imposition of serve tax. It is procedural and a matter of calculation. Merely because no rules are framed for computation, it does not follow that no tax is leviable.
It is seen that the Honble Delhi High Court held that service component of any contract involving service with sale of goods could be levied service tax. In our considered view, it is appropriate that the matter should be examined by the adjudicating authority in the light of the decision of the Honble Delhi High Court in the case of G.D. Builders (supra) and other cases. Accordingly, we set aside the impugned order and both the matters are remanded back to the adjudicating authority to decide afresh all the issues in the light of the decisions of the Honble Delhi High Court and the Tribunal. The appeals are allowed by way of remand. Needless to say that the adjudicating authority should give proper opportunity of hearing before passing order. We make it clear that this order is passed without expressing any view on merit. The stay applications are disposed of.
(Order dictated and pronounced in the open Court)
Mathew John P.K. Das,
Technical Member Judicial Member
BB
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