By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether benefit of small scale service provider’s exemption notification is applicable, if value of services after deducting sales portion is below threshold exemption limit – Held – Yes.
Facts:
In this case, Show Cause Notice was issued to assessee holding that services provided by it were classifiable as “maintenance & repairs service” upto 15-06-2005 and thereafter under “cleaning services.” The assessee preferred appeal before the Commissioner (Appeals) who held that, services provided by the assesse are in the nature of works contract and accordingly gave relief to the assessee. Revenue preferred appeal before the Tribunal.
Held
The Tribunal observed that the work order relied upon by department for the purpose of issue of Show Cause Notice gives an impression of execution of works contract. The contract was a lump sum contract and it also exhibits that there was an element of sale of goods being incorporated in different services dealt by the contract. The Tribunal also observed that, there was a specific plea recorded in the adjudication order from the assesse that once the value of goods sold is excluded from the value of works contract, the value of taxable service rendered would be below Rs. 4 lakh for the financial year 2005-07 and the Respondent would be eligible for exemption for small service providers under Notification No. 6/2005-S.T. On this ground, it was held that the appeal was filed without considering the basic plea of the Respondent, a small service provider and accordingly dismissed the same.
