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2022 (9) TMI 165 - AT - Service TaxValuation of service - service towards installation or commissioning - whether 33% of the price/ value should be treated as value of taxable service towards installation or commissioning? - Department entertained a view that the activity of installation of weighing scales/machines at the customers premises should be considered as a taxable service, defined under Section 65 (39) of the Finance Act, 1994 - HELD THAT:- The appellant had not separately charged, billed or received any amount from the customers towards installation charges for installing the weighing machine at the customer site. Since on the entire value of excisable goods, the appellant had discharged the Central Excise duty liability in terms of Section 4 of the Central Excise Act, 1944 and had not claimed any deduction, exclusion, abatement towards installation charges, they cannot be taxed under the provisions of Section 65 (39) ibid, considering the appellant as a service provider. It is an admitted fact on record that on the entire value including installation of the machine, the Central Excise duty had been paid by the appellant and retained by the Government under such heads of account, the appellant cannot be burdened with the service tax liability, upon consideration of the fact that they had provided the taxable service of installation and commissioning to their customers. In the case of ALIDHARA TEXSPIN ENGINEERS VERSUS COMMR. OF C. EX. & CUSTOMS, VAPI [2010 (8) TMI 145 - CESTAT, AHMEDABAD], the Tribunal has held that when the assessee was primarily and mainly engaged in the manufacture of textile machinery and the contract was entered by them with the customers for a lumpsum amount and the price was inclusive of installation and commissioning charges and when the assesse had paid central excise duty on the complete value and not claimed any deduction on account of installation/commissioning charges, the question of demanding service tax on ad hoc value of installation/commissioning charges was untenable in law. In an identical case, in the matter of COMMR. OF C. EX., VAPI VERSUS ALIDHARA TEXTOOL ENGINEERS PVT. LTD. [2009 (1) TMI 129 - CESTAT AHMEDABAD], it has also been held by the Tribunal that the process of erection and commissioning at the byers premises is incidental to the manufacture of the machine and therefore, the erection and commissioning services provided can also be said to be in relation to the manufacture and not a service, in order to fall within the purview of service tax net. The issue arising out of the present dispute is no more open for any debate. Therefore, the impugned order cannot be sustained for judicial scrutiny - Appeal allowed - decided in favor of appellant.
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