By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Erection, commissioning or installation services- When installation charges not separately collected, whether the activity would be covered under the scope of this service? Only the service element needed to be taxed, the matter was remanded for considering relevant records.
Facts:
The appellant, manufacturer of solar water heater system, sold these goods to dealers and customers on site. The appellant did not charge separately for installation of such system, but the dealers were charging installation charges. The department issued SCNs that the appellant was required to pay service tax on the activity of installation @ 33% on the total value, considering the abatement under notification no. 15/2004. The appellant provided the cost sheet of manufacturing solar system and the service component included therein. However, the adjudicating authority did not consider the same and confirmed the demand on the grounds that the appellant failed to provide the service component separately in the invoices. The appellant relied on the decision of Kaushal Solar Equipments Pvt. Ltd. 2012 (26) STR 561 (Tri.-Mumbai) wherein on identical facts, the matter was remanded back for quantification of service component.
Held:
The activity of installation was covered under erection, commissioning or installation services even when the same was not separately shown on invoices. The matter was remanded back to work out the service component from the data provided by the appellant in view of the Hon’ble Tribunal’s decision in case of Kaushal Solar (supra).
