2018 (5) TMI 678 – CESTAT ALLAHABAD – TMI – Works Contract Service – original works – service tax liability @40% or otherwise – work relating to laying of underground cables under or alongside the road – Abatement – Held that: – the learned Commissioner have rightly allowed deduction for work relating to laying of underground cables under or alongside the road, following N/N. 123/5/2010-TRU dated 24 May, 2010.
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The learned Commissioner have erred in not allowing the abatement is provided in Rule 2A Clause (ii) (A) which provides – where the value has not been determined under Clause (i), the person liable to pay tax on the taxable service involved in the execution of the works contract shall determine the service tax payable in the following manner –(A) In case of works contract entered into for execution of original works, service tax shall be payable on 40% of the total amount charged for the works contract.
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There is failure on the part of learned Commissioner to allow th
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e of SCN and as per the ST-3 returns filed by the appellant-assesse, and further imposed equal amount of penalty under Section 78 alongwith penalty under Section 77(1) and 77(2) of the Finance Act, 1994. 2. The learned counsel for the appellant-assessee points out from the show cause notice that it is admitted fact that the appellant-assessee is engaged in works contract service which includes also some repair and maintenance work particularly of transformers. They are also engaged in a small manner in rent-a-cab service and manpower supply service. From the Table 1 in Para-20 of the SCN, it is apparent that the gross receipts have been taken as per form 26AS (under the Income Tax provisions) and on such gross receipts for the period 2010-11 to 2014-15 without allowing any abatement the service tax have been demanded. There appears to be no examination as to the taxable nature of the gross receipt as per the provisions of the Service Tax Law and the Rules thereunder. Pursuant to the re
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also the work for repair and maintenance of transformers. He further states that according to the appellant-assessee the service tax admitted and payable shall be as follows: – S. No. Particulars (2) Gross Amount (3) Abatement (4) Net Amount Taxable (5) Rate of Tax (6) Service Tax (7) 1. Works Contract for Purvanchal Nigam Ltd. & UP Power Corporation Ltd. Works Contract for repair and 132,597,380 @ 30% 37,079,214 @ 30% 86,518,166 12.36% 10,693,645 2. maintenance of transformer 37,289,312 11,186,794 26,102,518 12.36% 3,226,271 3. Rent-a-cab 1,258,800 755,280 503,520 12.36% 62,235 4. Manpower Supply 1,773,500 1,330,125 443,375 12.36% 54,801 TOTAL 160,886,692 48,266,008 112,620,684 14,036,953 4. It is further evident that as per the above table by taking only 30% rebate the service tax liability comes to ₹ 1,40,36,953/- whereas the appellant have admitted service tax liability as per their ST-3 returns of ₹ 1,41,49,548/- which includes the liability for other services of s
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to the extent of dropping of demand of service tax raised in the SCN prior to 01 July, 2012 alongwith penalty. 6. Heard both the parties and perused the records. 7. Having considered the rival contentions we find no merits in the appeal of Revenue as the learned Commissioner have rightly allowed deduction for work relating to laying of underground cables under or alongside the road, following Notification No. 123/5/2010-TRU dated 24 May, 2010. 8. So far the appeal of the appellant-assessee is concerned. We find that the learned Commissioner have erred in not allowing the abatement is provided in Rule 2A Clause (ii) (A) which provides – where the value has not been determined under Clause (i), the person liable to pay tax on the taxable service involved in the execution of the works contract shall determine the service tax payable in the following manner -(A) In case of works contract entered into for execution of original works, service tax shall be payable on 40% of the total amount c
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