TMI Blog2023 (5) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the cost of material and the element of service for both supply as well as installation of the equipment. On the basis of VAT amount paid on the supply component, the jurisdictional VAT authorities have assessed the appellant-assessee on the basis of the declarations made by them. Since, one statutory competent authority is accepting the modus operandi adopted by the appellants, considering the transaction as sale of goods, for the same set of transaction, different view cannot be expressed by the other government department namely, the service tax department in claiming that the supply amount has not been properly reflected in the books of accounts by the appellants. Since, the adjudicating authority has not recorded any specific finding as to what amount is to be considered for the purpose of determination of the service tax liability, there are no hesitation, but in accepting the commercial documents submitted by the appellants to conclude that there is proper bifurcation of the amount towards supply of equipment and towards the services for installation and commissioning of the same at the site of the customer. In the case of Lumino Industries Ltd. [ 2022 (1) TMI 509 - C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e equipment and service tax on the component of installation and commissioning services. In respect of the other second model of business, the appellants are only engaged in installation and commissioning activities, on which they discharge the service tax liability under appropriate taxable entry provided under the statute. The department in this case has disputed that the appellants had not paid service tax on the gross amount of the equipment supplied as well as installed at the site of their customers. Accordingly, proceedings were initiated against the appellants, seeking confirmation of the service tax demand. The matter arising out of show cause notices were adjudicated upon by the original authority vide order dated 28.02.2014, wherein the original authority had confirmed the service tax demand on the appellants along with interest and also imposed penalties. Against the said adjudication order, the appellants have preferred appeals before the Tribunal, which were disposed of vide order dated 01.07.2014 in remanding the matter to the original authority, with the specific direction to examine the records of the appellants to the effect that there is involvement of both suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of VAT invoices for the sale of materials to customers. ii. The customers are not even aware of the value of individual items reportedly sold. The assigned values to individual items are known only to the Appellant and not the customers. c. Stipulation of the following conditions in the contract proves that there was no sale of goods/materials to the customers: (Refer Para 21, page 50) i. There is no separate contract for the sale of goods, indicating the details of goods sold and their value to the customers. ii. There is no document evidencing the sale of goods directly to the customers. iii. The customer is not even aware of the details of materials used since the contract is an indivisible works contract. iv. The contract mentions the specification and does not deal with the materials to be sold to the customers. v. The contract also states that packaging/leftover materials shall be the property of the Appellant. d. The contracts in respect of Model 2 are not materially different from the contracts in Model 1, as the essential nature of the contract is to design, supply, and install the elevator. e. The decisions on the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Systems Pvt. Ltd. vs. Commr. of S.T., Bangalore [2009 (14) STR 43 (Tri. - Bang], as upheld by the Hon ble Supreme Court in [2012 (28) STR J44 (SC)]. ii. Safety Retreading Company (P.) Ltd. vs. Commr. Of S.T., Bangalore [2009 (14) STR 43 (Tri.-Bang], upheld by the Hon ble Supreme Court in [2012 (28) STR J44 (SC)]. iii. M/s Johnson Lifts Pvt. Ltd. vs. Commissioner of Service Tax, Chennai 2017 (9) TMI 32- CESTAT Chennai]. iv. Commissioner of CGST CX, Kolkata vs. Lumino Industries Ltd. [2022 (1) TMI 509 CESTAT Kolkata]. v. Hindustan Aeronautics Ltd. vs. Commr. of Service Tax, Bangalore [2010 (17) STR 81 (Tri. - Bang)]. 4. On the other hand, learned Special Counsel appearing for the Revenue reiterated the findings recorded in the impugned order and supports confirmation of adjudged demands on the appellants. 5. Heard both sides and examined the case records. 6. The provisions for valuation of taxable services for the purpose of charging service tax is contained in Section 67 ibid. Determination of the value and manner of payment and collection of tax has been provided in Rule 2A ibid. The relevant statutory provisions are extracted herein below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be leviable to service tax. On a conjoint reading of both Section 67 and Rule 2A ibid, it reveals that wherever Value Added Tax (VAT) or Sales Tax has been paid on the supply of goods, such value should be deducted for the purpose of determination of the service component, on which service tax is liable to be paid by the assessee. On perusal of the contract and other documents available in the case file, we find that the appellants had clearly demonstrated the cost of material and the element of service for both supply as well as installation of the equipment. On the basis of VAT amount paid on the supply component, the jurisdictional VAT authorities have assessed the appellant-assessee on the basis of the declarations made by them. Since, one statutory competent authority is accepting the modus operandi adopted by the appellants, considering the transaction as sale of goods, for the same set of transaction, different view cannot be expressed by the other government department namely, the service tax department in claiming that the supply amount has not been properly reflected in the books of accounts by the appellants. Since, the adjudicating authority has not recorded any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the invoices which were produced before us clearly indicate materials charges and labour charges differently and we also find that in the very same invoices clearly indicate the discharge of Central Sales Tax as the amount of material cost. The invoices produced before us are not disputed by the Revenue. On perusal of the invoices, we find that the contention of the ld. Counsel for the appellant that they are charging for parts/materials separately and paying sales tax is correct. If that be so, we find that the decision of the Hon'ble Supreme Court in the case of M/s. BSNL (supra) will directly cover the issue in favor of the appellant as regard the non-includability of the value of the parts/materials for arriving at the correct Service Tax liability. We also find that the Principal Bench of the tribunal in the case of M/s. Delux Colour Lab Pvt. Ltd. and ors. (supra) were dealing with similar issue, wherein it was held that sale cannot be treated as service and vice versa. 7. In the case before us, the appellant has produced invoices which would clearly indicate that there is a sale of the parts/materials and there is also a element of labour charges charged separatel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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