Commissioner Of Service Tax, Mumbai vs Nikhil Comforts

(Arising out Order-in-Original No. 26/STC/BR/09-10 dated 15.02.2010 passed by the Commissioner of Service tax, Mumbai)

For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)

1. Whether Press Reporters may be allowed to see No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy Seen of the Order?

4. Whether Order is to be circulated to the Departmental Yes authorities?

Commissioner of Service tax, Mumbai Appellant

Vs.

Nikhil Comforts Respondent

Appearance:

Shri K.S. Mishra, Addl.Comm (AR) for the appellant Shri K.P. Chaudhari, CA for the respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)

Date of hearing : 03/06/2015 Date of decision : 03/06/2015

O R D E R No:..

Per: M.V. Ravindran:

This appeal is filed by the Revenue against Order-in-Original No. 26/STC/BR/09-10 dated 15.02.2010.

2. The respondent has also filed a Cross-objection.

3. Heard both sides and perused the record.

4. The issue involved in this case is regarding the demand of service tax on the appellant. It was noticed by the lower authorities during the scrutiny of ST-3 returns that the appellant had claimed abatement of value under Notification 1/2006-ST dated 01.03.2006 as also benefit of Notification 12/03. The lower authorities issued a show-cause notice to the respondent directing them to show-cause why such benefit of such abatement be not denied to them. The respondent contested the matter before the Adjudicating Authority on merits and submitted that they had availed only benefit of Notification 1/2006-ST and did not avail benefit of Notification 12/03-ST. the Adjudicating Authority after following the due process of law dropped the demands raised by the show-cause notice holding as under:-

3.1. I have examined the records of the case and submissions made by the assessee carefully. The allegation in the show cause notice is that the assessee availed double benefit both under Notification No. 1/06 and 12/03. No further supporting evidence was elaborated on this allegation. The assessee indicated Notification No.12/03 in their ST-3 return under the category 'abatement'. It is apparent that the use of words "abatement" and "exemption" interchangeably resulted in the substantial confusion. As mentioned in the show cause notice itself that the assessee indicated the abatement value in the ST-3 return, failed to show the appropriate notification number. It was further alleged that the only abatement notification applicable to the service rendered by the assessee is 1/06 which is not available if Notification No.12/03 was availed. It is clear on examination of the ST-3 that no double benefit has been availed on the taxable value. The total taxable value was shown as Rs. 16,98,28,047/-. An amount of Rs.11,37,84,792/- which constitutes 67% of the taxable value was claimed as abatement under Notification No.12/03. The percentage of abatement (67%) along with the word abatement claimed apparently let to the doubt that Notification No.1/06 has been claimed along with Notification No.12/03 which was mentioned in ST-3. As pointed out by the assessee, this is not arithmetically possible. Without going into the documentary evidence and merit, it can be stated that the assessee, subject to fulfillment of the conditions, is eligible for Notification No.12/03 or Notification No. 1/06. From the ST-3 return, it is clear that no tax has been paid through cenvat credit. Even if it is considered that 67% abatement from the value is not available under Notification No.12/03, the same will be available under Notification No. 1/06 subject to the condition no cenvat credit is availed and no exemption under Notification No. 12/03 is availed. There is no allegation or evidence to show the assessee is not eligible for Notification No.1/06.

3.2. Accordingly, after careful consideration of the allegation made in the show cause notice, assessee's reply and the documents, I find that there is no support to the allegation that the assessee has availed abatement under Notification No.1/06 along with the benefit under Notification No.12/03. As there is no other allegations in the show cause notice, I find that there is no support to demand further service tax from the assessee on this ground.

5. As against the above recorded factual findings, the grounds of appeal which has been taken by the Revenue before us indicates only an unsupported plea that the appellant had availed benefit of Notification 1/2006-ST and benefit of Notification 12/03-ST. There is no supporting evidence to indicate that the respondent had availed benefit of Notification 12/03-ST. We find that the respondent has followed the condition laid down by Notification 1/2006-ST inasmuch as there is no allegation in the show-cause notice that they had availed Cenvat credit on inputs or capital goods or input services. We also find that there is nothing on record to indicate that the respondent had claimed or issued invoices for the actual material supplied for the services rendered by them; in this case, installation and commissioning service. In the absence of any evidence that the respondent had claimed dual benefit of Notification 1/2006-ST and Notification 12/03-ST, we find that the Revenues appeal fails.

6. The impugned order is correct, legal and does not suffer from any infirmity. Accordingly, the appeal is rejected.

(Operative part pronounced in Court)

(P.S. Pruthi) (M.V. Ravindran) Member (Technical) Member (Judicial)

//SR

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