Custom, Excise & Service Tax Tribunal
Devasia Construction vs Commissioner Of Central Excise, ... on 16 January, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/85308/14 (Arising out of Order-in-Original No. KLH-EXCUS-000-COM-010-13-14 dt. 25.10.2013 passed by the Commissioner of Central Excise & Service Tax, Kolhapur ) For approval and signature: Honble Shri Ramesh Nair, Member (Judicial) Honble Shri Raju, Member (Technical) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
=======================================================
Devasia Construction
:
Appellant
VS
Commissioner of Central Excise, Kolhapur
:
Respondent
Appearance
Shri V.B. Gaikwad, Advocate for Appellant
Shri Vivek Dwivedi, Asstt. Commr. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Honble Shri Raju, Member (Technical)
Date of hearing : 16/01/2018
Date of pronouncement : 31/01/2018
ORDER NO.
Per : Raju
This appeal has been filed M/s. Devasia Construction against order confirming demand of service tax, interest and imposing penalty under Section 76,77 and 78 of the Finance Act.
2. Ld. Counsel for the appellant argued that they are engaged in construction of civil works and were holding Central Excise Registration under the category of Commercial or Industrial Construction Service. Revenue conducted certain enquiries and thereafter examining the copies of Income Tax Return, Balance Sheets, Ledger Accounts and Service Tax, Challans issued show cause notice demanding service tax and seeking to impose penalties under various Sections of the Finance Act. The appellant reply to the show cause notice and in their reply they listed the names of 20 clients for whom they had done the work. Out of 20 clients in case of 8 clients they claimed that the said buildings were for non-commercial use (educational/social welfare) or of the residential building having 12 flats and therefore no demand of service tax under the category of commercial or industrial construction could have been raised. For the rest of the 12 transaction they admitted that the construction activity was for the commercial purposes. However the value of work included the material used in the said activity the appellant claim the benefit of Notification No. 1/2006-ST dt. 1.3.2006. He further argued that the activities for these 12 contracts were in the nature of works contract and it can be charged from two tax only w.e.f.1.6.2007 under the works contract service. For this assertion they relied on the decision in the case of CST Vs. Turbotech Precision Eng. Pvt. Ltd. 2010 (18) STR 545 (KAR) and the case of Strategic Engineering Pvt. Ltd. 2011(24) STR 387 (Mad. HC).
2.1. He further argued that the demand of Rs.21,213/-on Rent-a-Cab service provided by them was also made. In that regard they have not contested the duty liability and the order to that extent has not been challenged.
2.2. Ld. Counsel pointed out that benefit of notification No.1/06 dt. 1.3.2006 was denied as they had failed to produce works order or invoices/bills in support of their claim before the original adjudicating authority and thus their claim that the value included the value of material has been disregarded.
2.3. Ld. Counsel further pointed out that their claim regarding the construction for 8 clients being non-commercial nature has also been disregarded on the ground that sufficient evidence of non-commercial/residential nature has not been given.
2.4. Ld. Counsel further pointed out that their claim that all these activities were in the nature of works contract has not been accepted on the ground that documents showing the proof of payment on account of VAT/Sales Tax had not been produced.
3. Ld. AR relies on the impugned order.
4. We have gone through the rival submissions. We find that the definition of the appellant is on following grounds:
(i) 8 Projects are in the nature of non-commercial/residential projects.
(ii) 12 Projects are in the nature of commercial construction however they are also works contract. Even if they are not considered works contract they are entitled to benefit of Notification No. 1/2006-ST by way of abatement.
(iii) They are not contesting the demand on account of service provided by renting on the cab.
5. So far as ground (i) & (ii) are concerned the impugned order denying the benefit essentially on the ground that the documents have not be produced. The appellant have produced all the documents in respect of all the parties before Tribunal. A perusal of the said documents shows that many of these are inclusive of the material and therefore are in the nature of works contract in many of the invoices produced VAT has been paid. In these circumstances, we find that the claim of the appellant that the value of the material is included in the contract prices is correct. It is seen that the contracts consist of numerous entries and some of the entries involved material whereas others do not involve material. In view of above each entry of the contract needs to be examined individually and thereafter the liability to tax under commercial or industrial construction or works contract need to be worked out. Since the documents produced clearly indicate that in many cases value is inclusive of material the exemption under Notification No.1/06 cannot be denied. In view of above, the impugned order which essentially confirms on demand on the ground that appellants have not failed to produce the evidence, is set aside. The matter in respect of issue (i) & (ii) raised above is remanded to the original authority for fresh adjudication on above terms.
6. The appeal is allowed by way of remand in above terms.
(Pronounced in court on 31/01/2018)
(Ramesh Nair)
Member (Judicial)
(Raju)
Member (Technical)
SM.
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ST/85308/14