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M/s Liberty Whiteware Limited Versus CCE, Jaipur – I

2017 (1) TMI 308 - CESTAT NEW DELHI

Composite contract with foreign supplier - erection, commissioning or installation services and consulting engineering service - technical assistance, engineering knowhow training etc - Held that: - It is evident that the contract involves both supply of goods as well as rendering of various services. Such contracts would be covered within the category of works contract service as a separate service in the statute w.e.f. 01/06/2007 - The Hon’ble Supreme Court in the decision of Larsen & Toubro L .....

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rvice elements by vivisecting the composite contract cannot be upheld. - The levy has been upheld on the basis of reverse charge mechanism. Section 66A was introduced into the statute w.e.f. 18/04/2006 providing for levy of service tax on reverse charge basis on the import of service. The position of law is well settled that prior to this date, service tax cannot be levied on reverse charge basis. In the present case, the period of dispute is 2005-2006 - Since all such invoices are prior to .....

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nst the order-in-appeal dated 21/02/2011 passed by the Commissioner (Appeals), Jaipur. The appellant is engaged in the manufacture of Ceramic sanitary- ware products classifiable under Chapter 69 of the Central Excise Tariff. The appellant entered into a contract with M/s Sacmi Cooperative Meccanisi Imola Societa Cooperative, Italy for supply of certain machinery, spare parts and equipment alongwith related engineering knowhow, training, technical assistance for assembly etc. This composite cont .....

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,83,129/- for the period 2005-2006 alongwith imposition of penalties under Sections 76, 77 and 78 of the Finance Act, 1994. When this order was challenged before Commissioner (Appeals), he confirmed the order-in-original vide the impugned order. In the present appeal, the main grounds are as follows :- (i) the activities undertaken by the foreign supplier cannot be subjected to levy of service tax during the period 2005-2006 for the reason that the import of service became taxable only w.e.f. 18 .....

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sion of the Hon ble Supreme Court in the case of CCE & CUS, Kerala vs. Larsen & Toubro Ltd. reported in 2015 (39) S.T.R. 913 (S.C.) ; (iii) it is also their submission that the activities undertaken by the foreign supplier by way of transfer of engineering knowhow will not amount to rendering consulting engineer service. Further, they have also objected to the charging of service tax under erection, commissioning or installation service with their argument that these activities were unde .....

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such as technical assistance and training. The various service elements are, however, listed separately in the contract in addition to the price paid for plant and machinery. It is evident that the contract involves both supply of goods as well as rendering of various services. Such contracts would be covered within the category of works contract service. Works Contract Service (WCS) has been introduced as a separate service in the statute w.e.f. 01/06/2007. The Hon ble Supreme Court in the deci .....

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