TMI Blog2018 (4) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... greement is for sale of goods back-to-back, that the scope of work indicated in agreement No.2 is for supply of various equipments, plant and machinery for wire rod mill No.2 - agreement No.2 is for supply of materials and cannot, by any stretch of imagination, be considered as an agreement for rendering services and the amount of advance received against this agreement, cannot become part of the value for demand of service tax liability - demand set aside. Appeal allowed in part. - ST/88145/2013 - A/92289/2017 - Dated:- 22-12-2017 - Mr. M.V. Ravindran, Member (Judicial) and Mr. C.J. Mathew, Member (Technical) Shri Gajendra Jain, Advocate, for appellant Shri Suresh Merugu, Deputy Commissioner (AR), for respondent ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f wire rod mills. He would submit that they had entered into three specific contracts and contract No.1 and 3 was for design and installation of the plant while agreement No.2 is for supply of materials. After making this submission, he would take us through the entire case records and agreement No.2, specifically to bring to our notice that agreement No.2 is only for supply of plant, machinery and equipment on back-to-back basis. He would submit that this value being only for supply, question of service tax liability does not arise. It is his further submission as regards the service tax liability on agreement No.1 and 3, that an advance payment for which was received and accounted for by invoice No.8 and 10, they had discharged the tax li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Whether appellant is required to be penalized for non-discharge of service tax liability on the taxable services agreed to be provided by agreement No.1, 2 and 3 for design and supply of plant, machinery and equipment and more specifically whether the demand of service tax liability on the amount of advance received from RINL is taxable in respect of supply of the plant and machinery. (b) Whether penalty imposed by the adjudicating authority on the services to be provided under agreement No.1 and 3 is correct or otherwise. 6. As regards the demand of service tax liability of an amount received as advance for the services to be provided as per agreement No.1 and 3, appellant is not contesting the tax liability and has discharged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue s case against the appellant is unacceptable. It is seen from the agreement that the said agreement is for sale of goods back-to-back, that the scope of work indicated in agreement No.2 is for supply of various equipments, plant and machinery for wire rod mill No.2. In our considered view, agreement No.2 is for supply of materials and cannot, by any stretch of imagination, be considered as an agreement for rendering services and the amount of advance received against this agreement, cannot become part of the value for demand of service tax liability. 8. In view of the foregoing, we hold that the demand of service tax in respect of invoice No.9 which is raised for advance amount of 10% against agreement No.2, is incorrect and needs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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