Oio no. 52/JC/2011 Dated 13/12/2011
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- Ekwy vkns”k Lka. Order in Original NO. 52/JC/2011 vkns”k dh frfFk Date of Order
- Brief Facts of the case
- 26.01.2005 to 28.02.2005 and from 01 02.2005 to 25.02.2005
- 10.01.2005 to 31.01.2005
- 04.11.2004 to 11.11.2004
- DEFENCE SUBMISSION : 14. The noticee vide letter dt. 11.09.07
- Sub: Applicability of service tax on taxable services provided by a non-resident or a person located outside India to a recipient in India-reg.
| OIO No. 52/JC/2011 Dated 13/12/2011
1- ;g izfrfyfi ml O;fDr dks futh mi;ksx ds fy, fu%'kqYd nh xbZ gSA ftls ;g tkjh fd;k x;k gSA 1. This copy of order is granted free of charges to the person to whom it is issued.
2. Any person deeming himself aggrieved by this order may appeal against this order to the Commissioner (Appeals), Customs & Central Excise, Central Excise Bhavan, Race Course Ring Road, Rajkot. 3- vihy dk QkeZ ,l-Vh-&4 nks izfr esa Hkjk tk, ,oa mlds lkFk fu.kZ; dh izfrfyfi ;k lsokdj fu;e] 1994 dh dye 8 esa fofufnZ"V vuqlkj vkns'k ds fo:) vihy dh izfrfyfi gksuh pkfg,A 3. The Appeal should be filed in form ST-4 as per Rule 8 of Service Tax Rules, 1994 and it shall be signed by the person as specified in Rule 3 (2) of the Central Excise (Appeals) Rules, 2001. 4- ikVhZ }kjk bl vkns'k dks O;fDrxr izkIr fd, tkus dh rkjh[k ls ;k Mkd }kjk izkfIr dh rkjh[k ls rhu eghus ds vanj vihy Qkby dh tkuh pkfg,A 4. The appeal should be filed within three months from the date of receipt of this order. [Section 85 of the Finance Act, 1994]. 5. blds lkFk fuEufyf[kr dkxtkr gksuh pkfg,A 5. The appeal should be accompanied by: ¼v½ ,slk vkns'k dh izfrfyfi ;k nwljs dh d izfrfyfi ftl ij uhps n'kkZ, v?khu fu/kkZfjr dksVZ dh Qhl LVsEi gksuh pkfg,A (a) Copy of this order which should bear court fee stamp as prescribed under Schedule 1 of Article 6 of the Court Fee Stamp Act, 1870, as under: (i) ;fn lCtsDV eSVj dh jde ;k ewY; ;k ewY; 50 :i; ;k 50 :i;s ls de gks rks :i;s 00-25 gksA
(ii) ;fn lCtsDV eSVj dh jde ;k ewY; ;k ewY; 50 :i; ;k 50 :i;s ls v/khd gks rks :i;s 00-50 gksA (ii) If such amount exceed Rs.50, then, Rs.0.50 paisa. ¼c½ vihy izfrfyfi ftl ij :i;s 2-50 dh dksVZ Qh LVsEi gksuh pkfg,A (b) A copy of the appeal should also bear a court fee stamp of Rs.2.50. 6. lsok dj ]naM ¼isuYVh½ vkfn ds Hkqxrku dk izek.k A Proof of payment of duty, penalty etc., should also be attached to the original form of appeal. Brief Facts of the case: M/s. Sogo Ceramic Pvt. Ltd., Old Ghuntu Road, Morbi (hereinafter referred to as "the Said Noticee") are engaged in the manufacture of Vitrified Ceramic Tiles falling under Chapter 69 of the Schedule to the Central Excise Tariff Act, 1985 and are holding Central Excise Registration No. AAHCS 4649 BXM 001. 2. Intelligence gathered by the Officers of Central Excise Division - II, Rajkot indicated that the Said Noticee had imported certain machineries like Pressing & Fast Drying, Firing, Handling Equipment and spare parts, Tiles Box Storage, Kiln Loading Machine, Polishing Machine and Glazing Line from Italy and the installation of the same were carried out by the technicians provided by the said foreign supplier but no Service Tax was paid by the Said Noticee on the services of installation provided by the supplier of the imported machinery. Therefore, the factory premise of the Said Noticee was visited on 27.10.2005 by officers of Central Excise, Division II and the machineries and the documents were verified. and found that the said Noticee had imported various machineries, as detailed below whose installation was carried out by the technicians provided by the supplier company having no establishment or office in India.
"erection, commissioning or installation" means any service provided by a commissioning and installation agency, in relation to- erection, commissioning or installation of plant, machinery or equipment; or installation of—
7. A statement dated 16.01.2006 of Shri Rameshchandra Bhanjibhai Patel, director of the Noticee firm was recorded under Section 14 of the Central Excise Act, 1944 before the Superintendent (PI), Central Excise Division - II, Rajkot, wherein he interalia stated that under Contract No. CPIN 03113 dated 12.02.2004 entered with M/s.Sacmi Irnola, Italy, they imported Pressing and Fast Drying, Firing, Handling Equipments and Spare Parts valued at 15,50,000 Euro for supply of machinery and 33,000 Euro for Spare Parts; that two - three technicians from the said foreign supplier came to their factory for the period from 26.01.2005 to 28.02.2005 and from 01 02.2005 to 25.02.2005 to provide technical assistance for machinery assembly and commissioning; that they have paid Euro 49,500 for the same; that under Contract No 167 FNL dated 12.05.2004, they had imported Storage Car from M/s. CMF Technologies, Maly valued at 119000 Euro; that one technician had came to their factory from said supplier for assembly and start up of the machine for the period from 15.12.04 to 20.12.04; that they have paid 14200 Euro for the said service, to the seller; that under Contract No. 01946041 M001126 dated 27.08.2004, they had imported Polishing Line Machine from M/s. SIMEC S. P. A., Italy, valued at 910000 Euro; that one technician from the supplier of the said machinery had came to their factory for the period from 10.01.2005 to 31.01.2005, for installation; that they had paid 10478.80 Euro for such service of installation; that under contract No. 170/04 A dated 16.05.2004, they have imported Glazing Line from M/s. SMAC, Italy valued at 460000 Euro that one technician had came from the said supplier to their factory for installation for the period from 04.11.2004 to 11.11.2004; that the value of machinery, shown in the contract is inclusive of installation charges; that all the technicians who had visited from the supplier abroad have stayed at Hotel Dariyalal at Morbi and the charges were paid by their company; that they have not paid any additional amount other than the amount shown in the contract, for installation; that the payments have been made through L.C and once through T.T. 8. The above four service providers are not having any office or establishment or permanent address in India and therefore, the Said Noticee was liable to pay the Service Tax on installation services received by them, as per Rule 2 (d) (iv) of the Service Tax Rules, 1994. The details of machineries, as per contract and the condition of installation, invoices and payment made are enclosed herewith as Annexure -A. 9. For the determination of value of services, it was observed that in three cases, separate value of service of installation were given and therefore, Notification No. 12/2003- ST dated 20.06 2003 would apply and service tax would be leviable on the value of services only, however, in one case the contracted price was inclusive of installation charges and no separate charges for the services of installation had been mentioned either in contract or in invoices. Thus, Notification No. 12/2003-ST dated 20.06.2003, which provides for exemption to taxable service to the extent of value of goods and material sold by the service provider to the recipient of service, would not be available to the Noticee. Therefore, Notification No. 19/2003-ST dated 21.08.2003 would be applicable in the instant case. Notification No. 19/2003-ST provides for exemption to the extent of 67% of total value (gross amount charged from the customer under a contract for supplying plant and machinery or equipment and commissioning or installation of the said plant and machinery). Therefore, in view of Notification No. 19/2003-ST, service tax is leviable on 33% of total contract value. 10. The said Noticee, vide letter dated 08.02.2006 informed that they have paid the amount of Service Tax Rs. 13,06,6777- (Rs. 12,81,056/- S. Tax + Rs.25,621/- Edu. Cess) vide challan No. EC/1/2005-06 dated 07.02.2006. 11. From above, it appeared that the Said Noticee had contravened the following provisions;:
(1) The service tax Rs. 13,06,677/- (Rs. 12,81,056/- S. Tax + Rs. 25,621/- Edu. Cess) should not be recovered and the already paid amount vide Challan No. E.C.I/2005-06 dated 07.02.2006, should not be appropriated under Section 73 of the Finance Act, 1994 alongwith interest as chargeable under Section 75 of the Finance Act, 1994; (2) Penalty should not be imposed upon them under Section 78 of the Finance Act, '1994. DEFENCE SUBMISSION: 14. The noticee vide letter dt. 11.09.07 requested for further 30 days time to file defence reply which was granted. The noticee vide their letter dt. 12.10.07 submitted they have already made reference to the department vide letters dated 08.11.05, 14.11.05, 09.12.05 and 31.12.05 and also they have already paid service tax Rs. 1306677/- vide Challan No. EC/1/05-06 dt. 07.02.06. Thus the department had full knowledge of the facts since NOV-2005, they are not liable to any penalty/interest and as the department ought to have issued the demand SCN within prescribed time limit of one year, the SCN dated 07.08.07 is time barred as none of clause (a) to (e) of Section 78 of the Finance Act, 1994 is applicable in the case. They added that as the service tax is already paid before issue of the SCN, provision for extended period for recovery of service tax under Section 73(1) of the Finance Act, 1994 is not applicable. They have relied upon the judgment in case of Continental Foundation Jt. Venture Vs. CCE Chandigarh-I reported at 2007(216) ELT 177(SC). The noticee submitted that service tax is not payable for the machineries which have been installed/commissioned before 01.01.05. 15 They added vide letter dtd. 20.08.09 that Civil Application No. 463 of 2009 filed by department against CESTAT Misc. Order No.ST/85/2008-(PB) dtd. 27.06.08 in case of Hindustan Zinc Ltd Vs. Commissioner [ 2008(11) STR 338 (Trib.-LB)] has been dismissed by the Supreme Court. Hence no service tax is payable on service provided before 01.01.05 and also for the service rendered between period from 01.01.05 to 15.06.05, as per ruling by Hon’ble Delhi High Court in case of Unitech Ltd Vs. Commissioner of Service Tax, Delhi [ 2009(15)STR) 385(Del.)], service tax is not payable. 16. They further vide letter dtd. 04.06.2010 submitted the copy of the Delhi High Court judgement in the case of S R Batliboi & Associates vs UOI and Ors and Ernest & Young (P) Ltd. as reported in 2010-TIOL-376HC-DEL-ST. DISCUSSION AND FINDINGS: 17. I have carefully gone through the facts of the case on record including the show cause notice and the various defence replies. I find that the noticee had imported machineries which were installed/ commissioned by technicians of the suppliers who were not having office/establishment in India, during the period from 04.11.04 to 28.02.05. It appeared that the services provided fall under taxable service of "Erection, Commissioning or Installation, as defined in Section 65 (39a) of the Finance Act, 1994. It appeared that the noticee being a service recipient was liable to pay tax on the services received as provided under Rule 2 (1) (d) (iv) of the Service Tax Rules, 1994. 18. It is on record, that the noticee have already paid service tax Rs. 1306677/- vide challan No. EC/1/05-06 dated 07.02.06. But they have been contesting the issue based on merits as also on the question of time bar. It is seen that the period of provision of service was prior to the period 18.4.2006. The issue whether the tax liability on taxable services provided by a non resident or a person located outside India to a recipient in India on reverse charge basis is applicable from 1.1.2005 or from 18.4.2006 has been clarified by the Board instruction from File No. 276/8/2009-CX8A dated 26.9.2011 is reproduced below: “Sub: Applicability of service tax on taxable services provided by a non-resident or a person located outside India to a recipient in India-reg. Kind attention is invited to instruction F No. 275/7/2010-CX8A, dated 30.6.2010, wherein the Board had communicated its view that services tax on a taxable service received in India, when provided by a non-resident/person located outside India, would be applicable on reverse charge basis with effect from 1.1.2005, and that the ratio of judgement in M/s Indian National Shipowners Association (INSA) case [2009 (13) STR 235 (Bom)] would not apply to such cases. Further, direction was issued to field formations to defend the levy of service tax on such services for the period on or after 1.1.2005, as post INSA judgment, it has been held by the High Courts/Tribunal in a large number of cases, applying ratio thereof, that service tax on such services is leviable only w.e.f. 18.4.2006. However, the appeals filed by the department before the Hon’ble Supreme Court, for defending the levy of service tax on such services w.e.f. 1.1.2005, have been dismissed recently (subsequent to the issuance of said instruction dated 30.6.2010) in the following cases. SLP (C) No. 29539 of 2010 in CCE Vs Bhandari Hosiery Exports Ltd SLP (C)No. 18160 of 2010 in CST Vs Unitech Ltd SLP (C) No. 34208/09 of 2010 in UOI Vs S R Batliboi & Co. SLP (C)No. 328/332 of 2011 in UOI Vs Ernst & Young SLP (C) No. 25687-25688/2011 in CCE Vs Needle Industries SLP (C) No. 25689-25690/2011 in UOI Vs SKM Engg Products Further, Review Petition No. 1686 of 2011 filed in the case of Bhandari Hosiery has also been dismissed by the Hon’ble Supreme Court vide order dated 18/8/2011. 2. In view of the aforementioned judgments of the Hon’ble Supreme Court, the service tax liability on any taxable service provided by a non resident or a person located outside India, to a recipient in India, would arise w.e.f. 18.4.2006, i.e., the date of enactment of section 66A of the Finance Act, 1994. The Board has accepted this position. Accordingly, the instruction F No. 275/7/2010-CX8A, dated 30.6.2010 stands rescinded.” 19. As discussed above I find that in this case, the services were provided prior to the period of 18.04.06 i.e. prior to enactment of Section 66A.Hence as clarified by the Board instruction quoted above no demand of service tax arises in this case and the showcause notice needs to be setaside. 20. In view of the above discussion, I pass the following order: ORDER I drop the proceedings initiated vide show cause no V.RJT-II/AR-Morbi/Addl.Commr./97/2007 dated 7.8.2007. (M. GNANASUNDARAM) JOINT COMMISSIONER F. No. V-ST/15-32/ADJ2006 By Regd. Post AD: To,
M/s. Sogo Ceranic Pvt. Ltd., Old Ghuntu Road, Morbi.
(i) The Assistant Commissioner (RRA), Central Excise, HQ, Rajkot. (ii) The Assistant Commissioner, Central Excise Division-ll, Rajkot. (iii) The Superintendent, Central Excise AR-Morbi. (iv) Guard file. Page of Yüklə 61,41 Kb. Dostları ilə paylaş:
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