TMI Blog2009 (3) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 - Dated:- 31-3-2009 - M.V. RAVINDRAN, JUDICIAL MEMBER AND T.K. JAYARAMAN, TECHNICAL MEMBER K.S. Ravi Shankar and N. Anand for the Appellant. Mrs. Joy Kumari Chander for the Respondent. ORDER T.K. Jayaraman, Technical Member - This appeal has been filed against Order-in-Original No. 47/2007, dated 6-2-2008 passed by the Commissioner of Central Excise, Customs and Service Tax, Cochin. 2. The appellants are engaged in (a) Commercial or Industrial Construction Service and (b) Construction of Complex Service (Residential). They were registered with the Service Tax Department. They paid Service Tax after availing abatement of 67 per cent of their gross receipts in terms of Notification No. 15/2004-ST, dated 10-9-2004 in case of Commercial Construction Services and Notification No. 18/2005-ST, dated 7-6-2005 and Notification No. 1/2006-ST, dated 1-3-2006 in case of construction of residential complexes for the period from 1-10-2005 to 31-3-2006. Show-cause notice dated 17-4-2007 was issued to the appellant on the ground that the cost of materials supplied was excluded for purpose of payment of Service Tax and the relevant Notifications viz., No. 15/2004-ST, date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STT 245 held that a transaction cannot be simultaneously liable to Sales Tax and Service Tax. (v) The impugned order is contrary to the decision of the Tribunal in the following cases : * Larsen Toubro Ltd. v. CCE 2004 (174) ELT 322/[2007] 7 STT 91 (New Delhi - CESTAT). * Schenck Jenson Nicholson Ltd. v. CCE [Stay Order Nos. S/108-109 of 2004, dated 18-2-2004]. (vi) Further, the reliance was placed on the following decisions for urging the point that service element involved in the execution of works contract was made liable for Service Tax only with effect from 1-6-2007. Prior to the said date, there cannot be any question of levying Service Tax. * Wallace Flour Mills Co. Ltd. v. Collector of Central Excise 1989 (44) ELT 598 (SC). * Collector of Central Excise v. Vazir Sultan Tobacco Co. Ltd. 1996 (83) ELT 3 (SC) * Ponds India Ltd. v. Collector of Central Excise 1997 (90) ELT 3 (SC). (vii) When the levy of Service Tax was not applicable prior to 1-6-2007, the question of valuation does not arise. (viii) Reliance was placed on the decision of the Madras High Court in the Larsen Tourbo Ltd. v. Union of India [2007] 11 STT 27 wherein it was held that on a read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (148) STC 616. The CBEC has been regularly in the context of other taxable services had been clarifying that there cannot be any 'double taxation' in cases where the services are rendered by a person through another person to the ultimate consumer, as long as the main person who has the contact with the customer is paying the service tax on the gross amount. Reliance was placed on the following Circulars : (i) TRU Letter F. No. 341/18/2004-TRU (Pt.), dated 17-12-2004 (ii) Circular No. 23/3/97-ST, dated 13-10-1997 (iii) Master Circular No. 96/7/2007-ST, dated 23-8-2007 (xv) The decision of the Commissioner is contrary to Hon'ble Apex Court's decision in the case of Bharat Sanchar Nigam Ltd. (supra) wherein it was held in paras 81 and 85 that State Legislature though have the power to levy sales tax but this power does not allow the State to entrench upon the Union List and tax services by including the cost of such service in the value of goods. (xvi) In the light of the earlier submissions, the levy of Service Tax on services involved in the execution of works contract was made liable for Service Tax only with effect from 1-6-2007, therefore, they were not liable for pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would definitely not mean the value of the materials supplied by the recipient of the service. In support of the above contention, the decision of the Hon'ble High Court of Madras in the case of Larsen Toubro Ltd. (supra) was relied on. In the Larsen and Toubro Ltd. (supra) case cited supra, the following observations have been made : "2. It is contended by Mr. Arvind P. Datar, Senior Counsel that by taking queue from the Explanation now added in Sl. No. 7 of the Notification No. 1/2006-S.T., dated 1-3-2006, the respondents are insisting that the value of the goods supplied and provided by the client of the assessee would also be included. On a reading of the Explanation, this Court is prima facie of the view that such an insistence is not in accordance with the Explanation. To that extent there will be an interim order as prayed for Notice." (p. 28) Even though it is only a stay order, the Hon'ble High Court has interpreted the Explanation to mean that the value of the goods supplied and provided by the client cannot be included for calculating the Service Tax. Further, insisting on including the cost of materials supplied by the service receiver will be contrary to sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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