Order Date – 06 April 2023

Parties: Laxmi Engineering P Ltd Vs C.S.T.-Service Tax – Ahmedabad

Facts –

• The Appellant, Laxmi Engineering P Ltd, are engaged in providing of Erection, Commissioning and Installation‖ and Management or repair services.
• On scrutiny of the documents submitted by the Appellant, it appeared that they had provided complete services of design, supply, erection, commissioning and installation. However Appellant had bifurcated the composite contracts into supply portion and service portion and were not paying service tax on supply portion.

Issue –

• whether the value of materials supplied by the Appellant under a contract is required to be included in the taxable value of Service or otherwise?

Order –

• The Tribunal observed that the contracts entered into by the appellants with their customers also gave the break-up of value of service portion and supply of material/goods portion. The Appellant as per the contract raise the bills and also account for the transaction in their books of account. On service portion they have paid the Service tax and on material supply portion paid the VAT/CST as applicable.
• Appellants have paid the VAT on the supply of goods, in such case it has to be held that the same were sold to the customers and the service tax cannot be demanded from the appellant on the value of the said goods.
• The Notification No.12/2003-S.T., dated 20-6-2003 applies to all the services including “erection, commissioning and installation services rendered by the appellant herein. The notification restricted for availment of Cenvat Credit to Service provider only, the said Notification nowhere imposed the condition related to non- availment of cenvat credit to service recipient. Therefore, the benefit of exemption under Notification No. 12/2003-S.T. cannot be denied to Appellant.