2018 (9) TMI 1669 – CESTAT CHENNAI – TMI – Valuation – Erection, Commissioning and Installation service – allegation is that the appellant has paid the service tax only on the civil construction part of the contract and that has artificially bifurcated the turnkey project into three separate contracts – Held that:- It is very much clear from the facts that the appellants had entered into different contracts with separate agencies – the issue decided in appellant own case [2018 (2) TMI 148 – CESTAT CHENNAI], where it was held that the appellant will be entitled to the benefit of abatement under Sl.No. 7 of the Notification ibid – the said allegation or the demand on this count cannot sustain and requires to be set aside.
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Composition Scheme – procedural lapse – allegation is that the appellant cannot opt to pay service tax under the composition scheme for the reason that they have failed to file intimation prior to payment of service tax under the composition scheme for works cont
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t the rate of 4% for the services rendered by them under works contract service. In the returns filed by them for earlier periods they had mentioned the services as Erection, Commissioning and Installation service. No concessional rate as per the composition scheme was availed and therefore the department was of the view that the appellant has short-paid service tax. Further, they had not intimated the department that they are opting to avail the composite service and therefore the discharge of service tax at 4% under works contract service was not correct and proper. It was also noticed that the appellant had entered into contracts for supply of equipments and erection / civil work and being composite contract like turnkey projects, all the individual contracts should be grouped together and viewed as a single contract for discharging service tax liability. Show cause notices were issued raising the demand of service tax that is short-paid on the above allegations along with interest
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us supported the findings in the impugned order. 5. Heard both sides. 6. The first issue is with regard to the allegation that the appellant has paid the service tax only on the civil construction part of the contract and that has artificially bifurcated the turnkey project into three separate contracts. It is very much clear from the facts that the appellants had entered into different contracts with separate agencies. The very same issue has been analyzed in the appellant s own case cited supra. The Tribunal held as under:- 7.1 In respect of supply contracts and the erection and commissioning contracts, practically there are no disputes. In the former no service tax is payable and in the latter, tax stands paid at full rate without abatement. The dispute centres around the contracts for civil works which admittedly involve the materials viz., cement and steel. The adjudicating authority has gone by the classification as declared by the appellant in their ST-3 returns under 65 (105) (
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t 7 etc. Consequently, such contracts merit classification under 65 (105) (zzq) under commercial or industrial construction service which also enjoys abatement in terms of Sl.No. 7 of the Notification No. 1/2006-ST. We are of the view that the appellant will be entitled to the benefit of abatement under Sl.No. 7 of the Notification ibid. The adjudicating authority was in error by blindly sticking on the classification under 65 (105) (zzd) as declared by the appellant in their ST-3 returns. Following the same, we are of the view that the said allegation or the demand on this count cannot sustain and requires to be set aside, which we hereby do. 6.1 The second allegation is that the appellant cannot opt to pay service tax under the composition scheme for the reason that they have failed to file intimation prior to payment of service tax under the composition scheme for works contract service. In Vaishno Associates (supra), the Tribunal has considered the said issue and held that it is on
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