TMI Blog2023 (9) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... e of SAFETY RETREADING COMPANY (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM, M/S TYRESOLES INDIA PRIVATE LMITED VERSUS THE COMMISSIONER OF CENTRAL EXCISE, GOA AND M/S LAXMI TYRES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2017 (1) TMI 1110 - SUPREME COURT] , the Hon ble Apex Court has held The finding of the Appellate Tribunal that it is the entire of the gross value of the service rendered that is liable to service tax, in our considered view, does not lay down the correct proposition of law which, according to us, is that an assessee is liable to pay tax only on the service component which under the State Act has been quantified at 30%. The impugned demand cannot sustain, for which reason the impugned orders deserve to be set aside - Appeal allowed. - HON BLE MR. P. DINESHA, MEMBER (JUDICIAL) And HON BLE MR. M. AJIT KUMAR, MEMBER (TECHNICAL) Shri S. Durairaj, Advocate for the Appellant Shri M. Ambe, Deputy Commissioner for the Respondent ORDER Order : [Per Hon ble Mr. P. Dinesha] The admitted facts that are emerging from the impugned Orders-in-Original are that the appellant is providing works contract services of manufacture, erecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the respective VAT Acts at the prevailing rates, the issue of demanding Service Tax under the pretext of the valuation being not in accordance with Rule 2A of the Service Tax Valuation Rules is already settled by the Hon ble Supreme Court in its decision in the case of M/s. Safety Retreading Co. (P) Ltd. v. Commissioner of C.Ex., Salem [2017 (48) S.T.R. 97 (S.C.)]. He would also rely on the following orders of this Bench of the Tribunal in the appellant s own cases for different periods: - i. Johnson Lifts Pvt. Ltd. v. Commissioner of Service Tax, Chennai [Final Order No. 41790 of 2017 dated 21.08.2017 in Service Tax Appeal No. 67 of 2009 CESTAT, Chennai] ii. Johnson Lifts Pvt. Ltd. v. Commissioner of Central Excise (ST), Chennai-IV [Final Order No. 40922 of 2018 dated 22.03.2018 in Service Tax Appeal No. 766 of 2010 CESTAT, Chennai] 4.2 The Ld. Advocate would also refer to one another order of this very Bench in the case of M/s. Touchstone Infrastructure and Solutions Pvt. Ltd. v. Commissioner of Central Taxes and Central Excise, Chennai North [2021 (11) TMI 695 CESTAT, Chennai] (Final Order No. 42436 of 2021 dated 18.11.2021 in Service Tax Appeal No. 425 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id taxes under the local Act whereunder it was registered as a Works Contractor, would no longer be in doubt in view of the clear provisions of Section 67 of the Finance Act, 1994, as amended, which deals with the valuation of taxable services for charging service tax and specifically excludes the costs of parts or other material, if any, sold (deemed sale) to the customer while providing maintenance or repair service. This, in fact, is what is provided by the Notification dated 20th June, 2003 and CBEC Circular dated 7th April, 2004, extracted above, subject, however, to the condition that adequate and satisfactory proof in this regard is forthcoming from the assessee. On the very face of the language used in Section 67 of the Finance Act, 1994 we cannot subscribe to the view held by the Majority in the Appellate Tribunal that in a contract of the kind under consideration there is no sale or deemed sale of the parts or other materials used in the execution of the contract of repairs and maintenance. The finding of the Appellate Tribunal that it is the entire of the gross value of the service rendered that is liable to service tax, in our considered view, does not lay down the corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails, are that the appellant provides finishing services on works contract basis to various parties. This work includes providing false ceiling, flooring, glazing, fixing up of partition, electrical work etc. The appellant charges a single amount for the entire contract without invoicing separately for the goods and the services. It is undisputed that the appellant is liable to pay service tax on these services under the head of works contract service and the appellant is also liable to pay VAT on the goods component of these contracts. The appellant paid VAT on the goods component reckoning 70% of the total contract of the value of the goods as per the provisions of Tamil Nadu Value Added Tax Act and Rules and paid service tax on 30% of the total contract value. The case of the Revenue is that since the appellant could not ascertain the actual value of goods transferred, it should have paid service tax under composition scheme. After calling for information from the appellant and examining the records, a show cause notice dated 21.12.2016 was issued to the appellant demanding differential service tax of Rs. 1,51,82,658/- as follows :- 4. The appellant paid VAT as per Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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