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2023 (9) TMI 870 - AT - Service TaxLevy of Service Tax - overhauling charges received for Repair and Maintenance service which is in the nature of works contract - liquidated damages - extended period of limitation - suppression of facts or not. Levy of service tax - overhauling charges - Repair and Maintenance service which is in the nature of works contract - services rendered to Ministry of Defence - activity of re-engineering of sub-assembly of battle tanks - period April 2010 to August 2014 - HELD THAT:- For the period prior to 01.07.2012, we find that the reliance placed by the appellant on the decision in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] is apt since works contract is involved and that portion of supply of goods has been undeniably subjected to VAT - For the period subsequent to 01.07.2012, the original authority has apparently accepted (vide paragraph 18.2 of the Order-in-Original) the apportionment of supply and service value since the valuation of works contract service is required to be done by adopting the Service Tax (Determination of Value) Rules, 2006. He finds that the apportionment has been adopted at 22% for the service portion for the period post September 2014 and hence, has proceeded to hold the same apportionment for the period from 01.07.2012 to 2014-15 (up to 31.08.2014) - thus, the repair and maintenance service, as provided by the appellant in the case on hand, to HVF, Avadi is not amenable to Service Tax under the said category and consequently, the demand to this extent cannot sustain - demand on repair and maintenance / overhauling charges for the period from April 2010 to August 2014 is set aside. Levy of Service tax - liquidated damages collected due to delayed supplies by job workers - period July 2012 to March 2015 and April 2015 to March 2016 - HELD THAT:- Reliance placed on orders of various Benches of the CESTAT wherein the said issue has been settled in favour of the taxpayer - reliance can be placed in M/S NEYVELI LIGNITE CORPORATION LIMITED VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, CHENNAI WITH M/S NLC INDIA LIMITED VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, TRICHY [2021 (7) TMI 1090 - CESTAT CHENNAI] and M/S. STEEL AUTHORITY OF INDIA LTD., SALEM VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2021 (7) TMI 1092 - CESTAT CHENNAI] - also, vide Circular No. 214/1/2023 Service Tax dated 28.02.2023, apparently, the Board has accepted the views of the CESTAT and thereby clarified that the Board has decided not to pursue the Civil Appeals filed against those orders before the Hon’ble Supreme Court. Hence, the demand on this cannot sustain - demand on liquidated damages for the periods from July 2012 to March 2015 and April 2015 to March 2016 is set aside. Extended period of limitation - suppression of facts or not - HELD THAT:- The issue was mired in litigation and interpretation of law; the undisputed fact is also that the appellant is a public sector undertaking and hence, there is no scope to allege suppression with an intention to evade tax. Therefore, the invoking of extended period of limitation is without any justification - invocation of extended period of limitation is held to be not in order. The impugned order is set aside and the appeals are allowed.
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