75th Founding Day Lecture Meeting on “India@2030” Know More

December 2014

[2014] 35 S.T.R. 351 (Tri. – Ahmd.) S.V. Jiwani vs. Commissioner of Central Excise & S.T.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Provisions of Rule 2(A) of the Service Tax (Determination of Value) Rules, 2006 applicable only when value cannot be determined u/s. 67(1)(2)(3) of the Finance Act and Rule 3(1) of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 is optional.

Facts:
Appellant were awarded a contract for setting up plant and service tax was discharged on the entire value of the contract under works contract service and CENVAT Credit was availed on inputs and input services. Department contended that under works contact services there is no option to pay tax at the full rate and thus the availment and utilisation of CENVAT Credit was incorrect.

Held:
The expression “subject to the provisions of section 67” under Rule 2A of the Valuation Rules means that if value of services involved in execution of works contract service cannot be determined u/s. 67 then only Rule 2A would apply. Rule 3(1) of the Composition Rules is merely an option provided to discharge the service tax liability and hence CENVAT Credit on inputs and input services is available since tax has been discharged @ full rate on the entire value of the contract u/s. 67 being a statutory provision of the Act.

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