TMI Blog2017 (6) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh for a decision by the Original Authority - appeal allowed by way of remand. - Service Tax Appeals Nos.58243/2013, 50268/2014 & 54149/2014 - ST/A/53082-53084/2017 - Dated:- 25-4-2017 - Mr. (Dr.) Satish Chandra, President And Mr. B. Ravichandran, Member (Technical) Rep. by Shri Gaurav Gupta, CA for the party. Rep. by Shri Sanjay Jain, DR for the Department. ORDER Per: B. Ravichandran These three appeals are involving similar issues and hence are taken up together for disposal. Order dated 19.03.2014 of Commissioner of Central Excise Jaipur-I is subject matter of two appeals - one by the appellant /assessee and another by the Revenue. The period involved is from 1.10.2005 to 31.03.2010. The third appeal is by the appellant/assessee against order dated 21.10.2013 of Commissioner of Central Excise, Jaipur-I. 2. The brief facts of the case are that the appellants/assessee were engaged in construction activities and were registered with the Service Tax Department under various taxable categories viz. Commercial or Industrial Construction Service , Construction of Complex Service and Works Contract Service . Certain inquiries were conducted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention money has been wrongly made by the Original Authority only on the ground that in their books of accounts they have credited the party account. The ld. Counsel submitted that when a debit entry is based on in the party retention money account, this means the money is still realisable. The service tax demand for ₹ 22,06,855/- is not liable to be paid. It does not mean that on transfer of amount of retention money from regular account to retention money account it is a realized amount. 5. Ld. Counsel submitted that the appellant/assessee, during the relevant period, received mobilization advances from service recipient. During the material time, the appellant/assessee were discharging service tax under the category of Commercial Industrial Construction Service claiming abatement of 67% in taxable value in terms of notification no.1/06 dated 1.3.2006. The Original Authority classified the service under the works contract service and did not allow either abatement or composition. There can be no service tax levy at full rate of 10.30% on full gross value on such contracts involving supply of materials also. 6. The appellants contested the confirmation of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Commissioner of Central Excise-I, Jaipur vide his order dated 18.10.2013. The Original Authority held that during the period 1.4.2011 to 31.03.2012 the appellants/assessee wrongly classified the services rendered by them under commercial or industrial construction service and paid service tax claiming the abatement in terms of notification no1/06-ST. All the projects and contracts executed by the appellant/assesse were involving transfer of property in goods on which the appellant /assesse were paying VAT/WCT. In such situation, the correct classification of the services rendered would be works contract service for which abatement under notification no.1/06-ST is not available. The Original Authority held that the appellants /assesse has not opted for composition scheme under works contract service in respect of most of the contracts and also provisions of Rule 2A of Valuation Rules applicable to Works Contract Service would not be extended to the appellant in absence of supporting evidences regarding value of materials supplied in the execution of the work contract. Accordingly, the Original Authority confirmed the service tax liability without allowing any abatement or compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax as and when the retention money is released to them. The appellant/assessee has also not contested such proposition. In fact, they have submitted a chart showing release details of retention money on which service tax has been paid later by them. This requires verification by the jurisdictional officer. Subject to such verification of the assertion made by the appellant, we find that there is no legal merit in confirming service tax liability on the retention money and kept by the service recipient in whatever manner. 14. The mobilisation advance received in case of works contract service is liable to service tax. This aspect is not contested by the appellant/assessee. The point of dispute is that during the material time, they were discharging service tax under the category of commercial or industrial construction service claiming abatement in terms of notification no.1/06 dated 1.3.2006. The Original Authority reclassified the services under works contract service . He also denied the abatement claimed by the appellant as not applicable to the works contract service. The fact remains that service tax cannot be levied and collected on the whole gross value of work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t/assessee against order dated 21/10/2017 of Commissioner of Central Excise Jaipur, we note that the original order confirmed service tax liabilities of rupees 4,20,46,501. The period involve is from 1/04/2011 to 31/03/2012. It is seen that appellant/assessee were paying service tax on these projects classifying the same under commercial or industrial construction service . They have availed the abatement in terms of notification number 1/06-ST. It was held by the original authority that all projects/contracts executed by the appellant/assessee involved transfer of the property in goods where the appellant/assessee were paying VAT/ST. Accordingly, the service rendered by the appellant/assessee were reclassified under works contract service. There is no dispute on these factual issues. However, the differential demand of service tax arose due to denial of abatement under notification 1/06-ST by the Original Authority on the ground that the said notification is not applicable contract service. While we find that the classification of service is not in dispute, it is clear that service tax cannot be levied and collected on the gross, total value of works contract when admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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