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TMI Blog2024 (12) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... the machines which included the charges pertaining to erection, installation and commissioning at the buyer's premises were also included in the assessable value of 'Draw Texturising Machines' cleared by them to their buyers. Following three show cause notices came to be issued. Sr No. SCN F. No. & Period Covered Date Amount of S. Tax demanded under Section 73 of FA 1994 Penalty proposed on assessee under:- Demanded under Personal penalty if any 1 2 3 4 5 6 7 1 Ch. (84) 3-52/ST/2008 02.12.2008 7,20,88,248/- Section 76,77 & 78 of FA, 1994 Proviso to Section 73 of FA, 1994 Yes, under section 76,77 & 78 of FA, 1994 on Shri Babubhai N Bhagat, Partner 2 V(Ch.84) 3-79/Dem/08 (Apr-08 to Feb-09) 23.03.2009 90,95,623/- Section 76,77, & 78 of FA, 1994 Proviso to Section 73 of FA, 1994 No 3 V(Ch.84) 3- 34/ST/Dem/09-10 (March-09) 17.03.2010 37,01,375/- Section 76,77, & 78 of FA, 1994 Proviso to Section 73 of FA, 1994 No 3. The above refund three show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidhare Taxtile Pvt Ltd reported under 2022 (12) TMI 11 CESTAT-Ahmedabad and therefore the matter is no longer res-integra. The relevant extract of the above mentioned decision in case of Alidhara Taxpin Enginners Pvt Ltd (supra) is reproduced here below:- "8. We have considered the submissions made by both the sides and have gone through the impugned order. Some of the undisputed facts in the present case are that, appellants are primarily and mainly engaged in the manufacture of textile machinery. A contract entered into by them with their buyers for a lump sum amount and the sale price is inclusive of installation and commissioning charges. It is also not disputed that appellants have paid the Central Excise duty on the complete value and have not claimed any deduction on account of installation and commissioning charges. In fact, no segregated amount stands arrived at in the contract towards the installation or commissioning charges. This is also undisputed that the appellants have availed the services of sub-contractors in respect of erection, installation and commissioning and such sub-contractors have paid service tax on the same which subsequently stands reimbursed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engers Medical Systems Limited v. Commissioner of Central Excise, Chandigarh - 2009 (14) S.T.R. 235 (Tri.-Del.) in an identical set of facts and circumstances has observed that where the assessee is paying Central Excise duty on the manufacture and sale of medical equipments on the total value recovered by them from their customers and where the activities of erection, commissioning and installation of equipments is a part of sale of excisable goods and where there is no separate charging for erection and commissioning of equipments, levy of service tax on such activities cannot be held to be proper and legal. The Tribunal held that activity of installation, erection and commissioning was incidental to the deliver of goods to the customers and as such, no service tax can be confirmed against the appellants. 11. Learned advocate has also drawn our attention to the decision of the Hon'ble High Court of Madhya Pradesh in the case of Maa Sharda Wine Traders v. UOI - 2009 (15) S.T.R. 3 (M.P.), the question placed before the Hon'ble High Court was as to whether bottling of liquor amounts to manufacture of liquor or only packaging so as to attract service tax. The Hon'ble High Court obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning being incidental to manufacture, has to be treated as continuation of the earlier process which started in the manufacturer's premises. In this case even though the position of the machine in CKD condition gets transferred to the buyer when it is removed from the factory as per the contract, the question to be examined is whether such a service is related directly or indirectly to the manufacture of their goods in question. As already mentioned by me earlier, the process of erection and commissioning at the buyer's premises is incidental to the manufacture of the machine and therefore the erection and commissioning services provided also can be said to be in relation to the manufacture, since the process in this case is complete only after the erection and commissioning takes place." The above observation made by the Tribunal, even though the issue involved was availment of Cenvat credit of service tax paid by them on erection and commissioning services, supports the appellant's case. 13. The Tribunal judgment in the case of Neo Structo Construction Limited - Order No. A/338-339/WZB/AHD/2010 dated 18-3-2010 [2010 (19) S.T.R. 361 (T)] was also produced before us in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers Medical Systems Ltd.- 2012 (277) ELT 184 (Tri.-Del.) 4. After hearing both the sides and on perusal of the record, it is seen that the representative of the appellants in his statement dated 13th October, 2005 stated that OBDI contained the total cost of equipment including the cost of machine and value of optional services such as erection and commissioning of machines and equipment sold by them. In reply to show cause notice, the appellants contended that they had been paying duty on the total invoice value of medical equipment charged from the customers, which establishes the activity of installation, commissioning or erection had been considered as part of sale. On perusal of the copy of the Central Excise invoice and the Annexure VI to the show cause notice, we find that the demand of tax was determined on the basis of Central Excise invoice value, as taxable value. It is also noticed that for some periods, taxable value has been taken as 33% of invoice value in terms of the Notification No. 19/2003-S.T. dated 21-8-2003 as amended. In some cases, total invoice value has been taken as taxable value since the appellant was availing Cenvat credit of invoice and benefit unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there under and the surrounding circumstances. If the intention is to transfer for a price a chattel in which the transferee had no previous properly, then the contract is a contact for sale. Ultimately, the true effect of an accretion made pursuant to a contract has to be judged not by artificial rules but from the intention of the parties to the contract. In a 'contract of sale', the main object is the transfer of property and delivery of possession of the property, whereas the main object in a 'contract for work' is not the transfer of the property but is one for work and labour. Another test often to be applied to is: when and how the property of the dealer in such a transaction passes to be customer is it by transfer at the time of delivery of the finished article as a chattel or by accession during the procession of work on fusion to the movable property of the customer? If it is the former, it is a sale if it the latter, it is a 'works contract'. Therefore, in judging whether the contract is for a sale or for work and labour, the essence of the contract or the reality of the transaction as a whole has to be taken into consideration. The pre-dominant object of the contract t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al excise duty was discharged thereon. So, the case laws relied upon by the learned DR are not applicable herein. 10. In view of the above discussion, we find that the demand of tax and penalties are not sustainable. Accordingly the impugned order is set aside. The appeal is allowed with consequential relief. M/s. Rahil Air Bubbles Pvt. Ltd.- Final Order No. A/11894/2019 dated 17.09.2019. 4. We have carefully considered the submission made by both sides and perused the records. We find that the entire transaction is of purchase of imported bubble wrap machines. The appellants have discharged custom duty considering the total value of machine shown in the invoice. There is no separate charge for service such are erection and installation of such machinery. On the total value of the invoice, Custom duty was paid. The erection and installation is incidental to the sale/supply of the machine. Therefore, the entire transaction is of sale and purchase of the machine and, hence, no service is involved. Therefore, no Service Tax can be demanded. This issue is squarely covered by the Tribunal judgment in the case of Bhavik Terryab (supra) wherein the Tribunal has passed the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er issues are kept open including the question of time bar raised by the appellant. Accordingly, the appeal is allowed by way of remand." From the above judgment, which is relied upon various decisions of this Tribunal where it was held that in case of import of machine including the erection and installation, it is not permissible to artificially bifurcate the service value from the total value. Accordingly, no Service Tax can be demanded for such import. Being an identical issue and the facts involving in the present case, it is squarely covered by the judgment of Bhavik Terryab (supra). Following the ratio of the said decision, we set aside the impugned order and allow the appeal. From the above judgments, it is settled that where the entire value of the goods is towards sale of the goods and subjected to excise duty/customs duty no part of the same can be said to have been collected towards any service. Therefore, involving the same set of facts, in the present case where the entire value has suffered excise duty and the buyer is under obligation to not only manufacture and supply the machinery but also to carry out activity of erection, commissioning and installation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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