M/s AGRIM ASSOCIATES PVT LTD Versus GST, NEW DELHI
Service Tax
2011 (4) TMI 845 – CESTAT, NEW DELHI – 2012 (25) S.T.R. 30 (Tri. – Del.)
CESTAT, NEW DELHI – AT
Dated:- 11-4-2011
511 of 2009 – ST/332/2011
Service Tax
Ashok Jindal, Mathew John, JJ.
For Appellant: Shri B L Narasimhan, Adv.
For Respondent: Shri Amrish Jain, SDR
Per: Mathew John:
In this case the Revenue is that the Applicant was providing service classifiable as “construction service” during 10.9.04 to 15.6.05 and as “Commercial or Industrial Construction service” during the period 16.6.05 to Sept. 07 as defined in Finance Act 1994. They availed benefit of notification No. 15/2004-ST during 10.9.04 to 28.3.06 and Notification 1/2006-ST for subsequent period and discharged service tax liability only on 33% of the contract value after availing abatement of 67%.
2. One of the representative contract was the contract dated 10.7.06 with Asian Hotels Ltd. As per this contract they were required to do dis
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n if they were liable to pay service tax under construction services, they were entitled to avail exemption under notification 12/2003-ST in respect of value of goods and materials sold in the course of executing the contracts in question on which due Sales Tax/VAT was paid by the applicant. They claim that the value of such goods and materials is much higher than the abatement (67%) claimed by the Applicant under Notification No. 15/2004-ST and 1/2006-ST and hence no question of short payment of service tax can arise.
6. The Ld. DR submits that the fact that the type of contract undertaken by them would be covered under “Works Contract Service” from 01-06-2007 is not a reason to conclude that it was not covered by other entries in existence prior to that date, especially because the definitions of the concerned services squarely covered the service provided by them during the said period.
7. The Ld. DR also points out that it is an express condition in the notification 1/2006-ST tha
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building or civil structure, referred to in sub-clause (c) of clause (25b) of section 65 of the Finance Act.
Explanation.- The gross amount charged shall include the value of goods and materials supplied or provided or used by the provider of the construction service for providing such service.”
11. We note that the meaning of “completion and finishing service” is to be taken from section clause (c) of section 65 (25b), which reads as under:
25b) “commercial or industrial construction service” means –
(a) construction of a new building or a civil structure or a part thereof; or
(b) construction of pipeline or conduit; or
(c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, const
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ST does not talk about inclusion of value of materials supplied free of cost by the receiver of the service. It only says that the value of materials sold by the provider of service should be included in the gross value before claiming abatement. The question whether the value of materials supplied by service receiver can be brought within the meanings of “gross amount charged” or “consideration” used in section 67 of the Finance Act 1994 is presently under dispute in many cases before the Tribunal and different Courts.
13. Notification 12/2003-ST reads as under:
“In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts so much of the value of all the taxable services, as is equal to the value of goods and materials sold by the service provider to the recipient of service, from the service tax leviable thereon under section (6
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