2011 (4) TMI 845 – CESTAT, NEW DELHI – 2012 (25) S.T.R. 30 (Tri. – Del.) – – Waiver of pre-deposit – exemption under notification 12/2003-ST – 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 – Held that:- The type of contract undertaken by assessee would be covered under “Works Contract Service” from 01-06-2007 – In the notification it is specified that an assessee should indicate the value of materials sold in each invoice. All what is required is that they should have documentary proof specifically indicating the value of the said goods and materials sold. When the applicants are making a claim that they have paid VAT on more than 67% of the gross receipts received by them and they have documentary proof by way of VAT returns, this claim cannot be brushed aside – Hence, the Applicants have made out a strong prima facie case in their favor for comple
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wer. 3. The Revenue contests that they were engaged in providing only finishing services and hence they were not eligible for the benefit of the said notifications. It is also alleged that in some of the contracts, the Applicants had received free of cost (FOC) materials from the service receivers and the value of such FOC materials was not included in the gross amount charged before availing the rebate of 67% provided under the notifications. The demand confirmed in the impugned service is based on the above arguments. 4. The Applicants submit that the contracts undertaken by them were in the nature of composite works contract which were made chargeable to service tax only with effect from 01-06-2007 under works contract service and hence the applicants were not liable to pay service tax during the impugned period. 5. They further submit that even if they were liable to pay service tax under construction services, they were entitled to avail exemption under notification 12/2003-ST in
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shing service. He also argues that this exemption was available only if the value of all the materials supplied free of cost by the receiver of the service was included in the gross receipts before applying the 67% abatement from the gross value. 8. The Ld. DR further contests that for claiming exemption under notification 12/2003-ST they should have indicated the value of the material sold in the concerned invoices. Since this was not done they are not eligible for the exemption and the demand has been rightly confirmed. 9. We have considered arguments on both sides. 10. The condition specified in Notification 01/2006-ST against S. No. 7, which is the relevant entry, reads as under: This exemption shall not apply in such cases where the taxable services provided are only completion and finishing services in relation to 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 va
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to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. 12. There can be a dispute whether activity undertaken by the Applicants is the one at clause (c) or that at clause (d) above. Further notification 1/2006-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:
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