2022 (11) TMI 862 - AT - Service Tax
Levy of service tax - work contract service - entire case of the department is based only on the contract between appellant and buyer of RMC - HELD THAT:- As per the contract, the entire transaction is of Works Contract. However, the appellant is mainly engaged in the manufacture of Ready-Mix-Concrete and selling the same to various buyers. As per the nature of product, it is necessary to supply RMC in a specialized container and after reaching at the customer’s site RMC is delivered by carrying out the process of pouring, pumping and laying of concrete at the customer’s place. The RMC cannot be unloaded at a particular place and thereafter shifted the same to a different particular place at site. Due to peculiar nature of RMC, it is unavoidable to deliver at particular place where the RMC is required to be laid-down. It is also the fact that appellant being manufacturer of RMC, paying excise duty not only on the value of the goods but also on the value of service of pumping, laying of concrete and the same is included in the sale value. Therefore, no value is escaped from payment of excise duty.
Accordingly, the entire activity right from the manufacturing of RMC and delivery at the site of the customer is excisable activity. Merely because the contract says that it is works contract, the actual nature of transaction cannot be overlooked.
The manufacturing activity of RMC cannot be covered under Works Contract by any stretch of imagination. Therefore, even though there is contract of Works Contract basically for the purpose of VAT Act, cannot be applied in the present transaction of manufacture and sale of goods in terms of Section 2(f) of Central Excise Act, 1944 - the department cannot take two stands, in one hand manufacturer for demanding excise duty and on the same activity, on the other hand demanding service tax under Works Contract - the activity of the appellant is predominantly of manufacture and sale of goods. Accordingly, the same cannot be charged with service tax under Works Contract service.
Service tax demand on supply of tangible goods service - HELD THAT:- The appellant has put forward the contention that it would be within the threshold limit. The details of rent collected covered by the show cause notice for the year 2016-17 is of Rs. 1,50,000/- and 2015-16 is NIL. It would go to show that the amount related to supply of tangible goods service is within the threshold limit of exemption of service tax provided under the Notification 33/2012-ST. dated 20.06.2012 - the demand of service tax on the supply oftangible goods services also cannot sustain and requires to be set aside.
Levy of service tax - legal services under reverse charge mechanism - HELD THAT:- Appellant is contesting the said demand only on limitation and submitted the copy of departmental audit report in support of their arguments - the demand is set aside on the ground of time bar.
The appeal is allowed.