M/S. Agv Alfab Ltd vs C.S.T., Delhi

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes

Appeal No.ST/436/2009-CU[DB]

[Arising out of Order-in-Original No.14/VKG/2009, dated 05.03.2009 passed by the C.S.T., Delhi]

M/s. AGV Alfab Ltd. Appellant

Vs.

C.S.T., Delhi Respondent

Appearance

Mr. A.K. Batra, CA - for the appellant

Mr. Rajiv Tandon, DR - for the respondent

CORAM: Honble Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

Final Order No.53322/2015, dated 31.07.2015

Per Mr. R.K. Singh :

Appeal has been filed against order and original dated 05.03.2009 in terms of which serviced a demand of Rs.1,88,90,240/- for the period 16.06.2005 to 30.09.2007 was confirmed under Construction Services (CS) / Commercial or Industrial Construction Service (CICS) under Section 65(25b) of Finance Act, 1994 along with interest and penalty on the ground that the appellant provided only completion and finishing services in relation to a building or civil structure and therefore was not eligible for the benefit of abatement under Notification No.15/2004ST dated 10.09.2004 and Notification No.1/2006-ST, dated 01.03.2006. The primary adjudicating authority also denied the benefit of Notification No.12/2003-ST, dated 20.06.2003 on the ground that the appellant did not show value of the material separately in its invoices.

2. The appellant has contended that (i) it provided service which involved supply of goods and therefore it paid service tax after claiming 67% abatement under Notification No.15/2004  ST and Notification No.1/2006ST. (ii) The service rendered was not merely completion and finishing service in as much as it was engaged in the business of internal fit out services such as aluminium doors, structural glazing, curtain walls etc. It involves fixing of panels, fabrication, cutting, bending and fixing of composite panels, fixing of glass panels on outer and inner building walls, providing and fixing of ACP cladding of escalators and such other similar services. Thus it was more than mere completion and finishing service and therefore the abatement of 67% was available. (iii) As per CESTAT judgements in the cases of Delux Colour Lab Pvt. Ltd. Vs. CCE, Jaipur [2009(13) STR 605 (Tri.-Del.)], Wipro GE Medical Systems Pvt. Ltd. Vs. CST, Bangalore [2009 (14) STR 43 (Tri.-Bang.)], BSNL [2014TIOL1684CESTATDEL] and some others the cost of material sold during the provision of service was not includible in the assessable value.

3. Per contra, Ld. Departmental Representative strongly argued that the service rendered by the appellant fell in the category of completion and finishing services as was evident from the nature of work done and therefore the benefit of 67% abatement was not available to the appellant. He, however, conceded that the benefit of Notification No.12/2003ST could be considered in respect of the material supplied in the course of rendering the impugned service provided the appellant was able to satisfy the conditions of the said Notification.

4. We have considered the contentions of both sides. Completion and Finishing Services are specifically included within the scope of CICS as is evident from Section 65 (25b) (c) ibid which reads as under:-

(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, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure;

From the sample scrutiny of work-orders provided by the appellant, it is evident that it was providing various interior services such as wooden & metal partition, plastering, painting, civil work, joinery items, floor & wall tiling and other similar services in respect of buildings or civil structures or part thereof. The item rates in the work-orders were inclusive of cost of material. In the light of the type of activities which are covered under the scope of completion and finishing services as per the definition quoted above, there hardly remains any doubt that the services rendered by the appellant were more appropriately covered under the scope of completion and finishing services, and therefore, the abatement of 67% under Notification No.15/2004-ST or No.1/2006-ST is clearly inadmissible as completion and finishing services have been expressly excluded from the coverage of the said Notification. However, the Ld. Departmental Representative conceded that if the appellant can demonstrate that they satisfied the conditions of Notification No.12/2003-ST, the benefit of the said notification can be extended in the wake of the decision of Delhi High Court in the case of GD Builders Vs. Union of India [2013(32)STR673(Del)]. Also, CESTAT in the case of Raj Furnitures [2014-TIOL-2267-Del] has held that the appellant cannot be disallowed to claim the benefit of Notification No.12/2003-ST and the same can be claimed by it even at this stage. However, the benefit of the said Notification (No.12/2003-ST) can be extended only if the appellant satisfie the conditions subject to which the benefit thereunder can be granted. CESTAT has also held in the case of Mehta Plastcorporation [2012-TIOL-616-CESTAT-DEL] that to claim exemption under Notification No.12/2003-ST it is not necessary that invoices should separately indicate the value of the goods sold and the benefit of the said notification can be granted when there is transfer of possession of goods. Both sides agree that this case may be remanded to the original adjudicating authority with a direction that the case should be readjudicated and appellants claim for the benefit of Notification No.12/2003-ST should be reconsidered.

5. In the light of the foregoing, we allow the appeal by way of remanding the case for de novo adjudication to the adjudicating authority with the direction that the impugned demand may be recomputed after allowing the benefit of Notification No.12/2003-ST provided the appellant is able to demonstrate that it satisfied the conditions of the said Notification for which the appellant may be granted an opportunity of being heard. Needless to say that the penalties will also need to be recomputed in the wake of the re-computation of demand. The appeal stands disposed of on the above terms.

(Justice G. Raghuram)

President

(R.K. Singh)

Member (Technical)

SSK

-2-