In case of divisible contract no service tax on material value

CESTAT, NEW DELHI BENCH

R.K. Industries

versus

Commissioner of Central Excise

FINAL ORDER NO. 55516 OF 2013
STAY ORDER NO. 56024 OF 2013
APPLICATION NO. ST/STAY/681 OF 2012
Appeal No.ST/319 OF 2012

FEBRUARY  6, 2013

ORDER

D.N. Panda, Judicial Member

This bench had an occasion to hear similar matters on divisible contract in the case of Balaji Tirupati Enterprises v. CCE [Vide Final Order No. ST/A/735/12-Cus, dated 21-11-2012] and CCE v. Kailash Transformers [Vide Final Order No. ST/A/402/12-Cus, dated 23-5-2012]. It was opined in those orders that insofar as supplies of material are concerned, such materials shall not be liable to service tax because Finance Act, 1994 is not a Commodity Taxation Law. Contract covering taxable service have been directed to be taxed. Both sides agree that present case is also a case of divisible contract and service element has suffered tax. In such a situation, we have no difference to earlier orders passed for which waiving requirement of pre-deposit, appeal is allowed.

NF