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TMI Blog2011 (2) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... ants are engaged in the activities of erection, commissioning and installation service. 2. The facts of the case are that it was alleged against the appellants that they are engaged in the activities of providing the services of "erection, commissioning and installation" of air conditioning and related works to various customers, such as military, railways, and airports etc. As per Finance Act, 1994, the aforesaid services are being undertaken by the appellants are being defined under Section 65(105) of the Finance Act, 1994 for which the appellants did not get themselves registered and failed to discharge service tax liability for the period from 1-10-2003 to 30-9-2008 and also not furnish periodical service tax return during the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that no such abatement scheme was available for the services classifiable under the taxable category of "execution of works contract service". In the impugned order, the Commissioner has dropped the demand pertaining to airports and Railway. 4. Learned Advocate for the appellants further submitted that as their contracts are composite contracts through which the appellants were required to supply complete systems to their customers as per agreement. In these circumstances, supply of complete systems cannot be termed as erection, commissioning and installation service. 5. He further submits that with effect from 10-6-2007, the activities undertaken by the appellants were covered under the execution of works contract service. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein 5% of the amount of the total contract is for the activity of erection, commissioning and installation. Hence, the adjudicating authority has erred in the facts by not giving the benefit of the amount at which the appellants have paid sales tax/VAT. The charge of service tax on the 33% of the total value of the contract after giving benefit of abatement of 67% is not sustainable when the contract, itself provide the amount of the activity of "erection, commissioning and installation." 8. Learned Advocate also submitted that the activities undertaken by the appellants on behalf of their customers, namely, Military Engineering Service (MES) are out of the scope of service tax as per the letter issued by the Director of Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount is 5% of amount of the whole of the work order. This fact has not been examined by the adjudicating authority. We find that the appellants have placed on record the letter issued by the Military Engineering Services dated 20-2-2008 wherein paras 2 & 3, it has been clarified as under : "2. Some of the formations intimated that Service Tax Deptt. in their area is insisting for the service tax on the service contracted by the MES for management, maintenance, repairs, erection and installation services. The matter was referred to the Ministry of Defence for the clarification, MOD has clarified the issue as under : "As per the clarification given by MOF, the basic principle to be followed with regard to the leviablity of service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tallation & commissioning as per the work, orders as discussed herein above. This fact has also been ignored by the adjudicating authority. 14. Therefore, in view of the above, discussion, we find that the matter needs re-examination by the adjudicating authority in the light of the discussion and findings hereinabove. Therefore, it would be appropriate in the interest of justice that the adjudicating authority shall examine the issue in view of the above observations and pass appropriate orders after giving a reasonable opportunity of hearing to the appellants to present their case. Therefore after setting aside the impugned order, the appeal is allowed by way of remand. The stay application is disposed of in the above manner. (The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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