TMI Blog2017 (9) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT on the remaining portion, we are of the view that any differential service tax demand beyond that already discharged for the period 1.6.2007 to 31.7.2007 is unsustainable and requires to be set aside, which we hereby do. The demand of CENVAT credit to the tune of ₹ 2,51,202/- also is seen to have been utilized by the appellant for payment of service tax prior to March 2007, during which period works contract service was held not to be liable to service tax, demand set aside. Penalties - Held that: - The demands for differential tax liability / recovery of credit having been set aside, the penalties imposed will also not sustain. Appeal allowed - decided partly in favor of appellant. - ST/67/2009 - Final Order No. 41790 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 07 1832502396 604725791 12.24% 74018436.8 33644744 40373693 2007-08 (up to 11.5.07) 354723227 117058665 12.24% 14327980.6 6512718 7815262 12.5.07 to 31.7.07 557065273 183831540 12.36% 22721578.4 10327990 12393588 3873009589 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, shall be taken as the value of transfer of property in goods involved in the execution of the said works contract for determining the value of works contract service under clause (i) 5. She submitted that as per the above provision, as the appellant has discharged VAT/Sales Tax on 85% of the value of the contract, they are not liable to discharge service tax on the said portion again. She also relied upon the judgment of the Hon ble Apex Court in the case of Safety Retreading Co. P. Ltd. Vs. Commissioner of Central Excise, Salem 2017 (48) STR 97 (SC), wherein it was held that the assessee was liable to pay service tax only on the service component which under the State Act was quantified at 30%. Thus, she asserted that in the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that works contract prior to 1.6.2007 are not subject to levy of service tax. Following the principles laid down in the two judgments, we hold that the demand prior to 1.6.2007 is unsustainable and therefore requires to be set aside which we hereby do. 10. As per the Table given above, a small portion of the demand pertains to 1.6.2007 to 31.7.2007. It is not disputed that the appellant have discharged service tax on 15% of the value of the contract and also that they have paid VAT/Sales Tax on 85% of the value of the contract. Thus, the entire contract has been subjected to VAT/Service Tax. It is the contention of the department that appellants ought to discharge service tax on 33% of the gross amount charged being the liability unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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