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2013 (9) TMI 391 - AT - Service TaxConstruction Activities – Duty Liability - The appellants were engaged in construction activities and they construct both residential complexes as well as commercial and industrial complexes – held that:- Prima facie the legal question of divisibility of the contract into sale of materials and for providing construction service seems to be supported by Article 366 (29-A) (b) of the Constitution of India and Bharat Sanchar Nigam Ltd. Vs. UOI [2006 (3) TMI 1 - Supreme court ]. Even if the question was answered in favor of the appellants the question arises as to whether such division had been done in an arbitrary manner or based on evidences and if so what type of evidence - An assessee cannot choose to pay either VAT or Service Tax as he pleases (obviously who will choose to pay that tax for which the rate is lower) and discharge of VAT on a particular value cannot be conclusive proof that the value of material involved corresponded to the value on which VAT was paid - In some cases Courts and Tribunal have taken such payment as sufficient proof. Prima facie the service tax authorities have every right to look into the issue whether the value had been correctly split - This issue had not been looked into at any stage by lower authority apparently because adequate documents other than payment of VAT have not been placed before the lower authority - The issue had been argued more on questions of law rather than questions of fact before lower authority and in the hearing before the Tribunal for stay too. The matter needs to be looked into closely during final hearing of the appeal. Stay granted partly.
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