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M/s Ahluwalia Contracts (I) Ltd. Versus CCE & ST, Ludhiana

2015 (11) TMI 1259 - CESTAT NEW DELHI

Waiver of pre deposit - commercial or industrial construction service - benefit of Notification No. 1/2006-ST - Inclusion of value of free supply material - Held that:- No service tax was payable for the service rendered under works contracts prior to 1.6.2007. However, the amount deposited by it during the said period had been recovered from the customers and therefore the appellant is not entitled to refund thereof. Consequently the appellant cannot count it towards any pre-deposit - during pe .....

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t and gave a finding as to how those figures were correctly worked out. It has observed that while the appellant started paying service tax under Composition Scheme for works contract service, it continued to recover higher amount of service tax by charging service tax from the customer at 33% of the value. Thus It is clear that as against recovery of ₹ 1,41,91,440/- towards service tax it only deposited ₹ 71,57,079/- and retained ₹ 70,34,361/-. Further the challans under which .....

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has been filed against order-in-original dated 27.11.2013 in terms of which service tax demand of ₹ 3,82,30,870/- was confirmed for the period 6/2006 to 3/2008 under commercial or industrial construction service along with interest and penalties on the ground that the appellant was not entitled to benefit of Notification No. 1/2006-ST inasmuch as it had not included value of free supply material and also taken Cenvat credit on input services resulting in short payment of ₹ 3,11,96,50 .....

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eme Court judgement in the case of L&T (2015-SCC-Online-SC-738). The ld. Advocate however conceded that this amount had been recovered by the appellant from service recipients. (ii) The demand which arises as a result of denial of 67% abatement works out to ₹ 3,11,96,509/- for the entire period including the period prior to 1.6.2007. Non-inclusion of the value of free supply material does not disentitle it to the benefit of 67% abatement in view of CESTAT judgement in the case of M/s B .....

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with the said amount of demand. 4. We have considered the contentions of both sides. The appellant is right in claiming that no service tax was payable for the service rendered under works contracts prior to 1.6.2007. However, the amount deposited by it during the said period had been recovered from the customers and therefore the appellant is not entitled to refund thereof. Consequently the appellant cannot count it towards any pre-deposit. We find force in the contention of ld. DR that 67% ab .....

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