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2014 (3) TMI 454 - AT - Service TaxPayment of full rate of service tax on works contract and availing CENVAT Credit on inputs and input services - Valuation under Service Tax (determination of value) Rules 2006 - Whether the appellant are correct in paying full rate of Service tax @ 12.36% or 10.30% (including education cess and SHE cess) and avail cenvat credit on the inputs and inputs services utilised for rendering of ‘Works Contract Services.’ - Held that:- Service Tax liability is to be discharged on the gross amount charged by the service provider. In the case in hand there is no dispute as to the value or gross amount which needs to be considered for discharge of service tax liability. It is admitted by both sides that the value of the works contract executed by the appellant is the value on which the appellant has discharged full rate of service tax. While applying provisions of 67(4) necessary implication is that the value for discharge of service tax liability needs to be determined by referring to service tax valuation rules. In the case in hand since there is no dispute as to the gross value charged by the appellant there is no necessity to take recourse for determining the value under Service Tax (determination of value) Rules 2006. Appellant is discharging full Service Tax under the category of Works Contract Service using Inputs and Input Service are used for rendering of ‘output services’; on reading of provisions of Rule 2(l) of the cenvat credit rules 2004 it would indicate that assessee is eligible avail to cenvat credit of Inputs and input services which are used to provide ‘output service’ which would include ‘setting up’ of a factory premises. In the case in hand, it is undisputed that the appellant had provided output services which covered by works contract for setting up of plant, it has to be held that cenvat credit availed by the appellant is in consonance with the provisions of the Cenvat Credit Rules 2004. We also hold that the discharge of Service Tax liability at full rate by the appellant by applying provisions of section 67 of the Finance Act 1994 cannot be called in question by the Revenue - Decided in favour of assessee.
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