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M/s Hargovind Electric Decorators And M/s Gupta Electric Decorators Versus CCE, Jaipur - I

2016 (4) TMI 411 - CESTAT NEW DELHI

Classification - Pandal or Shamiana services - Section 65 (77a)&(77b) of the Finance Act, 1994 - Appellant contended that supply of light and light fittings to a building or a place which is not a Pandal or Shamiana cannot be covered under “Pandal or Shamiana contractor service”, therefore, not covered under taxable service - Held that:- considering the definition of Pandal or Shamiana it is clear any place prepared or arranged for organizing an official, social or business function will become .....

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ised by them as sub-contractor, therefore, again the liability cannot be raised against them - Held that:- the tax liability discharged by the main contractor is as per the applicable legal provisions and it cannot be said that the main contractor is acting as an gent to discharge the tax liability of sub-contractor. The tax liability of the appellants are to be decided as per the applicable provisions of law during the relevant time. The admitted position is that the appellants could not state .....

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ints clarified therein is the service tax liability of sub-contractors if tax is paid by main contractor. It is noted that the question of double taxation will not apply to the present situation as the Cenvat Credit Rules provides for the situation where, subject to satisfaction of all the conditions, the tax paid on the input services are eligible as credit for the output service provider. As such, there is no merit in the appellant’s claim in this regard. - Nature of Functions - The appel .....

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tion falls under any one of these three categories. Apparently religious function will not be covered for taxation. A social function even if held in a religious place may not be excluded for tax liability. From the nature of functions as examined in detail and presented in the appeal, no categorical evidence have been submitted to claim exclusion from the category of these functions in relation to which the appellants provided service either directly or indirectly. Therefore, the services so pr .....

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ed Representative (DR) ORDER PER. B. RAVICHANDRAN :- These 7 appeals dealing similar issues, hence, are taken up together for disposal. The brief facts of the case common to these appeals are that the appellants are engaged in providing services of light decoration to various customers directly or indirectly in connection to Pandal or Shamiana. The Department initiated certain enquiries on the ground that the appellants did not discharge service tax due on their activity. Show cause notices were .....

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quantum of tax. The present appeals are against the orders passed by the learned Commissioner (Appeals). Two main points which are contested by the appellants are that : (a) supply of light and light fittings to a building or a place which is not a Pandal or Shamiana cannot be covered under Pandal or Shamiana contractor service and (b) they were working as a sub-contractors to a main contractor who have been discharging service tax including the amount of bill raised by them as sub-contractor. .....

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ness function ; [Explanation. - For the purposes of this clause, social function includes marriage ;] Section 65 (77b) : pandal or shamiana contractor means a person engaged in providing any service, either directly or indirectly, in connection with the preparation, arrangement, erection or decoration of a pandal or shamiana and includes the supply of furniture, fixtures, lights and lighting fittings, floor coverings and other articles for use therein; 2. On perusal of the definition of Pandal o .....

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e tax liability. One has to go by the definition given under the Finance Act, 1994 to decide the tax liability. Considering the definition of Pandal or Shamiana it is clear any place prepared or arranged for organizing an official, social or business function will become a Pandal or Shamiana. An open ground or a garden or a already existing building can also be categorized under this. Keeping this definition in mind it is clear that the appellant s activity of providing lights and light fittings .....

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dia reported in 2011 (24) S.T.R. 385 (Del.), we find that the Hon ble High Court was examining the status of a Hindu marriage whether a social function or religious function . There was no analysis on the meaning of Pandal or Shamiana with reference to statutory definition under Section 65 (77a). 3. Regarding the second point of the appellants working as sub-contractors and when the main contractor discharged service tax on the whole gross value, again the liability cannot be raised against them .....

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oviding such service has to necessarily pay service tax. 4. Reliance is placed by the appellants on a Circular dated 07/10/1998 of CBEC. We find that the clarifications relied upon by the appellants were issued prior to the introduction of Cenvat Credit Rules. The appellants have contended that the main contractors have paid service tax on total gross value which included the sub-contractor portion of the service. Here, we find that the tax liability discharged by the main contractor is as per t .....

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service of the main contractor. Such proposition will go against from principle of Cenvat Credit Rules and make the credit flow as mandated by these Rules as redundant. After the introduction of Cenvat Credit Rules and various changes in the legal provisions, the CBEC issued a master Circular on 23/08/2007. One of the points clarified therein is the service tax liability of sub-contractors if tax is paid by main contractor. We also take note that the question of double taxation will not apply t .....

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