2014 (33) STR 372 (Bom) Space Age Associates vs. UOI

Facts:
The Appellant provided services of erection, commissioning and installation of power stations to various electricity boards. The contract entered with customers were composite contracts where supply of goods and services were involved. The Appellant was registered with the Service tax department and discharged Service tax liability. The revenue confirmed the demand on account of mismatch between the figures reflected in the ST-3 Returns and those in the P & L A/c. also invoking longer period of limitation. The plea that supply of goods was part of sale figure was not taken cognizance of.

In the Appeal before the Tribunal, the Tribunal dropped demand beyond the period of limitation but upheld the demand for normal period on account of  non-availability of deduction under Notification No. 12/2003 –ST on account of the Appellant’s failure to produce sale invoices and directed to pre-deposit Rs. 1 crore. The Appellant contended that it had already produced sample copies of running bills, its sales tax returns etc. which were sufficient for claiming deduction under the said Notification.

Held:
Notification No. 12/2003 is a conditional notification which extends the benefit only upon the Appellant producing the documentary proof, indicating the value of goods supplied while rendering the service. The above condition does not mean that the goods have to be necessarily shown separately under the invoices. If the Appellant is able to show from the documents such as running bills, contract copies, returns filed with Sales tax authorities, it would be held that it is complying with the conditions. The Tribunal committed a fundamental error in insisting only upon the production of invoices as evidence of goods sold and ignoring the running bills, sales tax returns, contract terms etc. to arrive at value of goods. The High Court, accordingly, set aside the Order and remanded the matter to consider the petition afresh and pass the appropriate order on merits.