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2022 (8) TMI 282 - AT - Service TaxValuation - Erection, Commissioning and Installation Services - non-inclusion of the value of goods/material supplied under the supply work orders in valuing the said taxable service - case of the Revenue as forthcoming from the SCN is that the separate work order for supply of goods and services have to be construed as a single EPC contract for the purposes of discharge of service tax and that there has been an artificial splitting in the value of goods and services so as to inflate the value of goods and suppress the value of services - extended period of limitation - applicability of N/N. 12/2003 - HELD THAT:- The taxable category “Erection, Commissioning and Installation Services” could only cover pure service contracts within its fold. It is observed that the Ld. Commissioner on one hand treats the separate work orders for sale/supply of goods and provision of “Erection, Commissioning and Installation Services” as an indivisible EPC yet at the same time rejected the taxability thereof under the category, “Works Contract Services” which is clearly unsustainable in light of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT]. The composite contracts in this case were divided into supply obligation and service obligation between the parties inter se for a pre-agreed monetary consideration. Since the work order for “Erection, Commissioning and Installation Services” was for consideration in money, the gross amount charged for such services alone could be subjected to service tax under Section 67(1)(i) of the Finance Act. The valuation framework as contained in Section 67 of the Finance Act does not seek to include within its ambit, any amount charged for sale/supply of goods and we are in complete agreement with the Appellant that higher or lower profit margin with respect to sale of goods cannot be a ground for questioning the value of a taxable service - It is well settled that levy of tax on sale/supply of goods and provision of services are mutually exclusive and it is not in the domain to assess whether VAT/CST was correctly discharged or otherwise. Deduction with respect to sale of goods to the Appellant under N/N. 12/2003 - HELD THAT:- When the Appellant has undisputedly not availed any credit of excise duty on the goods sold to ‘TSL’. The proviso to Notification No. 12/2003 only restricts the availment of credit in the hands of the service provider as evident from Clause (b) thereof and therefore, as to whether ‘TSL’ was entitled to avail Cenvat credit of excise duty on the said goods is an altogether separate question having no bearing on the instant proceedings. As the appeal are allowed on merits, the aspect of limitation, need not be entered into - appeal allowed - decided in favor of appellant.
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