Case Law Details
Hamon Shriram Cottrel Pvt Ltd Vs Commissioner of C.E. & S.T.-Vapi (CESTAT Ahmedabad)
The case of Hamon Shriram Cottrel Pvt Ltd vs Commissioner of C.E. & S.T.-Vapi, heard by CESTAT Ahmedabad, addresses a crucial issue regarding the imposition of service tax on the sale of goods. This article delves into the detailed analysis and conclusion of the CESTAT ruling.
The appellant, engaged in manufacturing cooling towers and providing related services, faced allegations of not paying service tax on the gross taxable value of goods sold to customers. The crux of the matter revolved around whether the sale of goods should be considered part of a works contract, thus subjecting it to service tax.
The appellant argued that the contracts clearly delineated between the sale of goods and the provision of services. Even though invoices were issued for both, they maintained separate values for goods and services. This distinction, they argued, exempted the sale of goods from service tax.
The tribunal examined legal precedents and found that the contracts indeed separated the transactions into distinct categories of goods and services. They cited judgments that supported the appellant’s contention, emphasizing that even if a contract appeared composite, if it could be discerned as separate transactions of sale and service, service tax could only be levied on the service component.
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