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CA Pratibha Goyal | May 17, 2022 | Views 43334

Appellant providing works contract service involving goods entitled to 67% abetment

Appellant providing works contract service involving goods entitled to 67% abetment

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT Delhi) in the matter of M/s. Ram Sewak Tiwari Vs. Commissioner of Customs, Central Excise & Central GST ruled out that Appellant providing works contract service involving goods entitled to 67% abetment.

The appellant M/s. Ram Sewak Tiwari is holding a service tax registration under the category of Maintenance or Repair Service, Erection, Commissioning and Installation Service and Works Contract Services. The Department observed that the appellant was engaged in providing Erection, Commissioning and Installation Services relating to petrol pumps for Indian Oil Corporation (IOCL hereinafter) and have received the payment of Rs. 5,32,33,197/- from IOCL for the period from 27.8.2008 to 31.3.2013 on which the service tax of Rs.56,17,768/- was payable.

But from the ST-3 returns of the appellant for the period August 2008 to March 2013 it was apparent that appellant has not paid the service tax. Accordingly, SCN was sent to the Appellant.

The Tribunal ruled out that, In view of the entire above discussion, we are of the opinion that the services provided by the appellant since involve the goods also which are leviable to sales tax / VAT, the contracts in question are definitely in the nature of works contract. Even if those being the contracts for Erection, Commissioning and Installation service. Since, the property in goods is also involved in rendering the said services, the appellant was entitled for the benefit of abetment of 67% under notification no. 19 of 2013 dated 21.8.2003. The appellant was entitled for exemption of 67% or the gross amount charged as the same was including the value of the pumps, plants and other equipments, etc. Seen from any angle, there appears no liability of the appellant as was proposed vide the impugned show cause notice and as has been confirmed by Commissioner (A) who no doubt has been given the benefit of 67% abetment. The findings of Commissioner (Appeals) therefore are opined to rather be contradictory in nature.

The question of invoking the extended period of limitation also does not arise in the present case as apparently and admittedly appellant is a registered service provider and was regularly submitting the ST-3 returns with no objection by the Department except for the impugned show cause notice, No suppression of facts or malafide intent to evade duty can be attributed to the appellant. Hence, no occasion for the Department to invoke the proviso of Section 73 of the Finance Act.

In view of the entire above discussion, the order under challenge is hereby set aside. Appeal stands allowed.”

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