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2016 (7) TMI 304 - AT - Service TaxDemand of service on Civil Work, Infrastructure Charges paid to TNEB - Denial of cenvat credit - erection and installation of the work of electricity generation system which is a composite contract involving the installation of generator as well as execution of Civil Work carried out by the appellant. - Held that:- Erection service provided was purely a Works Contract Service since that involved Civil Works as well as Electrical Works. Such works carried out before 01.06.2007 shall not be taxable . So far as Erection Charges is concerned, pertaining to the period 01.04.2008 to 33.03.2009, it may be stated that, that shall be liable to tax and what that is done by the learned adjudicating authority is proper. The Infrastructure Charges paid to TNEB and incurred by the appellant directly as well as reimbursed to it, is not in relation to any services provided by the appellant to its clients. Therefore, in the absence of any taxing entry to tax such receipts the appellant is not liable to service tax thereon. The Cenvat credit denied pertains to the input credit taken by the appellant for use thereof in manufacture of the generators. The generator not being liable to duty by virtue of exemption, appellant is liable to pay back entire credit taken to the State with interest. It is made clear that utilisation of the credit shall be calculated from the date of utilisation thereof and interest, if any, payable shall be calculated from that date till the period that was paid back to State. Accordingly appellant is liable to penalty. However considering the facts and circumstances of the case, to reduce the dispute, it would be proper to direct the appellant to deposit 25% of the demand of duty on this count of ineligible credit issue pertaining to the period 01.10.2006 to 31.03.2008. Decided partly in favor of assessee.
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