Case Law Details
Para Enterprises Private Limited Vs Commissioner of Service Tax (CESTAT Chennai)
CESTAT Chennai held that nature of service involving both service as well as transfer of property in goods/material is classifiable under ‘works contract. Hence re-classifying the same under erection, commission and installation is unsustainable in law.
Facts- The appellant is a manufacturer of Wind Turbine Generators (WTG), commonly known as windmills. The appellant would also undertake the activities of erection, commission and installation services and maintenance and repair services of windmills against composite orders.
After perusal of the balance sheet, it appeared to the Revenue that the appellant had shown huge amount of expenditure towards “erection and commissioning charges” under the schedule of ‘expenses’, but however they had been collecting a fixed amount towards the same on which they had also paid the Service Tax. This prompted the issuance of Show Cause Notice dated 28.09.2012 and Statement of Demand dated 03.04.2013 proposing, inter alia, to demand Service Tax.
The adjudicating authority in the Order-in-Original dated 22.01.2014, extracted the scope of work and thereby has acknowledged that what was entered into between the parties was a composite contract order for purchase of WTG and erection and commissioning thereof.
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