TMI Blog2014 (7) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... services on which VAT / Sales Tax is not paid by the appellant. As per Rule 2A(ii) of the Service Tax (Determination of Value) Rules 2006, the actual value of transfer of property in goods involved in execution of the works contract is not to be taken into consideration while discharging Service Tax liability under the works contract services. It is the claim of the appellant that VAT/ Sales Tax was paid on the actual material value of the material sold, as per audit account furnished to the adjudicating authority and on examination of the records, it seems to be so. However, this matter whether VAT/ Sales Tax has been paid on the actual materials sold to the service recipient is required to be gone into detail by the adjudicating autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the contract constitutes 15% of the total contract value and the remaining 85% value of the contract represents the material portion sold to the customers and VAT is also paid on the materials so sold. That regular VAT/Sales Tax payments are made and returns are filed with the respective VAT authorities. It was his case that as per the provisions of Explanation to Rule 2A of the Service Tax (Determination of Value) Rules 2006, the value equivalent to the transfer of property is not required to be taken into consideration while discharging the Service Tax liability. It was submitted that the material cost on which VAT/ Sales Tax liability is discharged is on actual value basis and not on approximate 15% as held by the adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract taken for the purpose of payment of Service Tax is not on actual basis and cannot be taken as proper value for discharge of Service Tax liability and Service Tax was required to be paid upon the gross value of the contract including the value of the materials supplied for which separate value is not available in the contracts. It was also his case that certain clauses in contract clearly convey that contracted value cannot be vivisected into material portion and the service portion. 5. Heard both sides and perused the case records. As the issue involved in the present proceedings lies in narrow compass, therefore, after allowing the Stay Petition, appeal itself is taken up for disposal. The appellant, inter alia, is providing ere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter whether VAT/ Sales Tax has been paid on the actual materials sold to the service recipient is required to be gone into detail by the adjudicating authority. Matter is, therefore, required to be remanded back to the adjudicating authority for de-novo consideration. Needless to say that the appellant should be given an opportunity of personal hearing before an order is passed by the adjudicating authority that VAT/ Sales Tax has been paid on the actual materials sold to the service recipient. It is made clear that we have not expressed any opinion on the merits of the case and all issues have been kept open for the adjudicating authority. 6. The appeal filed by the appellant is allowed by way of remand to the adjudicating authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
