Oswal Cables Pvt. Ltd. Vs Commissioner of Central Excise and Customs (CESTAT Delhi)
Summary: M/s. Oswal Cables Private Limited, engaged in manufacture of power cables and other electrical products and in providing various taxable services, had availed exemption under Works Contract Service by deducting 60% abatement from taxable value received during April 2011 to March 2016. The Department alleged that the appellant had wrongly claimed the Works Contract Service abatement because no transfer of property in goods was involved in execution of the relevant contract. It further alleged that the value of goods supplied free of cost by the service recipient had not been included in the taxable value, resulting in alleged short payment of service tax of Rs.32,55,453/-. Suppression with intent to evade service tax was also alleged.
The appellant had entered into two separate work orders with M/s. Power Grid Corporation of India Limited (PGCIL): one for supply of equipment and material manufactured by the appellant and another for inland transportation, insurance, unloading, handling, storage at site, erection, testing and commissioning of equipment and material for Rural Electrification works in Nagaur District of Rajasthan under RGGVY. The appellant contended that the second contract involved both material and labour and therefore constituted Works Contract Service. It relied upon payment of works contract tax under the Rajasthan VAT Act, the deduction certificate issued by Ajmer Vidyut Vitran Nigam Limited, and discharge of service tax under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007.
