CA Certificate Establishes Fact of use of Material in the Work Executed: CESTAT allows Claim of 67% Abatement in Value of Construction Contract
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the appellant is entitled to an abatement of 67% in the value of the contract of construction. The two bench members, S.S. Garg (Judicial Member) and P. Anjani Kumar (Judicial Member) considering the records submitted before the tribunal, held that the contract was not simpliciter but was...
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the appellant is entitled to an abatement of 67% in the value of the contract of construction.
The two bench members, S.S. Garg (Judicial Member) and P. Anjani Kumar (Judicial Member) considering the records submitted before the tribunal, held that the contract was not simpliciter but was a composite contract.
The appellant, M/s Makkar Construction Company is engaged in construction services and is registered for the same; the appellants have undertaken some construction for M/s Kangaroo Industries under a contract.
The department was of the opinion that the contract did not specifically indicate the involvement of any material in the service provided by the appellants.
During the period 01.10.2005 to 31.03.2006, the appellants had availed abatement as provided under Notification No.15/2004-ST dated 10.09.2004 and1/2006-ST dated 01.03.2006. However, the department was of the opinion that the said abatement was not applicable to the involvement of the material in the contract.
Before the adjudicating authority, the counsel for the appellants presented evidence in the form of a contract, Value Added Tax (VAT) returns, certificates from a chartered accountant, a Chartered Engineer, and other documents. The evidence clearly showed that the appellants had paid for steel, cement, and other items.
The bench viewed that the Certificates issued by the Chartered Accountant and Chartered Engineer establish the fact of the use of the material in the work executed by the appellants.
The contract further specified the quality of the materials in some clauses and, in addition, the copies of the Value Added Tax returns and the invoices unambiguously demonstrate the purchase of steel, cement, and other material essential for the construction. The contract was also clearly for the construction on the basis of a rate fixed for each square foot.
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