Custom, Excise & Service Tax Tribunal
M/S. Raj Kishan & Co vs Cce, Chandigarh-I on 24 September, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066 COURT NO. II ST/Stay/2163/2012 in Service Tax Appeal No. 848 of 2012 with C.O. No. 3153/2012 [Arising out of Order-in-Original No. CHD-CEX-001-COM-021-12 dated 09.04.2012 passed by the Commissioner, Central Excise, Chandigarh] Date of Hearing/decision: 24th September, 2012 M/s. Raj Kishan & Co., Appellant Vs. CCE, Chandigarh-I Respondent
Present for the Assessee : Shri B.L. Narasimhan, Advocate Present for the Respondent : Shri Amresh Jain, D.R. Coram: Honble Shri D.N. Panda, Judicial Member;
Honble Shri Mathew John, Technical Member FINAL ORDER NO. ________________ Per D.N. Panda:
Learned Counsel submits that if the table appearing at para B-2 at page 23 of appeal memo is read that shall give a prima facie view about the nature of work done and admissibility of abatement as well as taxability. So far as items No. 1 & 2 of the table are concerned, his principal grievance is that the materials were used for execution of work order with those two parties mentioned in one of the table. He also submits that perusal of the work order also indicates involvement of materials. All proofs and evidences are available to satisfy the authorities in respect of use of the goods in the contract and, hence, abatement is admissible to the extent of 67%.
2. So far as items No. 3 & 4 of the table are concerned, there was involvement of cost free material for execution of work order. So far as item No. 5 is concerned, considering limitation and permissible abatement there may be demand. So far as item No. 6 of the table is concerned the work was executed not for use of the project commercially. Item No. 7 of the table certainly calls for abatement in view of the involvement of goods.
3. Revenue submits that to avail the benefit of abatement there should be evidence of supply or providing or use of the goods and materials in the contract. This is requirement of law. Since the appellant failed to provide such evidence learned Adjudicating Authority disallowed the abatement.
4. Heard both sides and perused the record.
5. Looking to the magnitude of the demand of Rs. 2.29 crores, we do not propose to keep the appeal pending in Tribunal in view of the rival submissions aforesaid. Therefore, we direct the appellant to deposit Rs. 30 lakhs (Rupees thirty lakhs only) within 8 weeks from today and produce challan before learned Adjudicating Authority within 4 weeks thereafter with an application for fixing date of hearing so that the appellant shall satisfy on their claim in respect of all the seven items appearing in the table as aforesaid.
6. If the appellant comply to aforesaid direction it deserves to be heard again and learned authority may examine the evidence that shall come before him along with entire defence plea both on facts and law that shall be pleaded by the appellant and affording proper opportunity of hearing shall pass a reasoned and speaking order.
7. Before parting with this order we would like to state that Finance Act, 1994 is not commodity taxation law. Therefore, the authority should not attempt to tax the commodity/goods incorporated in the contract except taxing service element, if any, declared by law to be taxable service. The appellant shall be given due opportunity to explain the contents of the material in each contract wherever abatement is claimed and the authority may adopt its own method of testing the evidence. We may say that normally that material used is verifiable from Profit & Loss account as well as tax returns filed. So also the VAT return may indicate the quantity of goods used in the contract. It may also be stated that once the appellant produces the evidence, it is entitled to opportunity to know the difference which learned Adjudicating authority proposes for explanation of the appellant. The appellant has full opportunity of confrontation in the event the authority has any further proposition against the appellant.
8. So far as free supply of material is concerned in view of the decision of the Tribunal in the case of Jai Hind Project Ltd. 2011 (23) STR J 130 (S.C.) it is necessary for the authority to work out the liability inclusive of free supplied material and exclusive of free supplied material so that both sides may not face controversy over the decision of the Apex Court. Efforts should be made by both sides to reduce the litigation on this count at the grass root level with their clear proposition.
9. When the claim of the appellant is also that certain buildings were not used for commercial purpose that aspect should be looked into by Adjudicating Authority in terms of the law and appellant should be given opportunity to explain the issue thoroughly.
10. In view of our aforesaid observations, both stay application and appeal are disposed. In view of disposal of appeal Cross Objection is also disposed.
(Dictated & pronounced in the Open Court) (D.N. PANDA) JUDICIAL MEMBER (MATHEW JOHN) TECHNICAL MEMBER RK 4 ST/Stay/2163/12 in & ST/848/2012