Custom, Excise & Service Tax Tribunal
M/S Shree Dhavir Construction vs Cce, Raigad on 8 April, 2015
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPEAL NO. ST/353/12 (Arising out of Order-in-Appeal No. US/121/RGD/2011 dated 24.02.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-II.) For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) =====================================================
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 : Yes 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?
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M/s Shree Dhavir Construction
: Appellant
Versus
CCE, Raigad
: Respondent
Appearance
None
: For Appellant
Shri B.K. Iyer, Supdt. (A.R.)
: For Respondent
CORAM:
HONBLE SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)
Date of Hearing : 08.04.2015 Date of Decision: 08.04.2015
ORDER NO.......................................................
Per: Anil Choudhary:
The appellant is in appeal against Order-in-Appeal No. US/121/RGD/2011 dated 24.02.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-II
2. The brief facts are that the appellant is engaged in the work of civil construction and also site formation service. The appellant had neither registered with the Service Tax Department nor was paying tax nor had charged service tax in its invoices. Preventive Team visited the appellants site in January, 2008 and on being so advised by the Preventive Team that the services rendered by the appellant are liable to service tax, the appellant started raising the demand towards service tax on its clients from April, 2008. It was the contention of the appellant that it had not charged nor collected nor paid for the lack of awareness on its part. The appellant have studied upto class III in Telgu medium. The appellant had deposited the service tax as admitted by him before issue of the show-cause notice. A show-cause notice dated 21.04.2010 was issued alleging that the appellant have been providing services chargeable to service tax, such services are provided to Roha Dye Chem. Pvt. Ltd. and hence the appellant is not eligible for abatement. Accordingly the appellant is required to show-cause as to why service tax be not demanded by classifying under the categories "Commercial or Industrial Construction Service" and site formation and clearance, excavation and earth moving demolition and accordingly service tax was proposed to be demanded at Rs. 15,12,098/- for the period October, 2004 to September, 2009 (extended period) with a further proposal to appropriate the amount of Rs. 11,52,000/- already deposited and further demand for interest and proposal to Levy penalty under section 76, 77 and 78 of the Finance Act.
3. The appellant did not file any reply to the show-cause notice nor appeared at the time of personal hearing in the adjudication proceedings. The show-cause notice was confirmed, clubbing the service provided by the appellant who started business in April, 2006 as well as with respect to service provided by Balaji Construction the proprietor of which was one Balraj Malayya Besta, who is separately assessed to income tax. The show-cause notice was adjudicated by ex-parte order and the proposed demand was confirmed and appropriated. Further penalty was imposed under Section 76, 77 and 78 of the Finance Act. Being aggrieved the appellant preferred appeal before the Commissioner (Appeals).
3.1 Before the Commissioner (Appeals) the appellant had raised the grounds that the clubbing done by the Revenue is wrong and he had started his business since April, 2006 under the name and style of Shree Dhavir Construction. He has no manner of concern with the proprietorship concern of his son namely Balaji Construction the proprietor of which is Balraj Malayya Besta. It was further urged that the appellant had paid the service tax as admitted before issue of the show-cause notice, and as such the whole adjudication proceedings are vitiated. It was also urged that the appellant is not liable for the service provided by Balaji Construction. Further no penalty is leviable as there was no deliberate default or contumacious conduct, as the appellant is not educated and was not aware of the provisions of service tax. Further urged that the show-cause notice is barred by limitation and accordingly prays for appropriate relief. The learned Commissioner (Appeals), went through copies of income tax records filed before him for the assessment years 2005-06 and 2006-07, but rejected the same holding, having no evidentiary value. Further relying on the statement of the proprietor of appellant concern Mr. Malayyapa Basappa, recorded under Section 14, he had stated that they had started civil construction business in the name of Balaji Construction as the proprietor in the year 2004 and the name of his firm has changed to Shri Dhavir Construction in the year 2006. Further observing that the service tax would've escaped collection, had not the Preventive Officers visited the appellant and as such for non-payment of service tax, upheld the penalty imposed under Section 77 and 78 but was pleased to delete the penalty under Section 76, relying on the ruling of this Tribunal in the case of CCE, Aurangabad Vs. Pedharkar Constructions 2011 (23) STR 75 (Tri.- Mumbai). Being aggrieved the appellant is before this Tribunal.
4. The appellant is absent in spite of notice and was absent on the last several dates also. Thus case is taken up ex-parte for disposal.
5. Heard the learned A.R.
6. Having considered the contentions, made by learned A.R. and on examining the records of the case, I find that the clubbing of the service provided by Balaji Construction is evidently wrong. The appellant had produced the copy of Income Tax records of the proprietor of Balaji Construction along with the PAN number. But without making further inquiry the same was rejected. Further the Revenue has relied upon the statement of an uneducated person, who is not aware of the provisions of law and does not understand the impact of the statements he had given. In such circumstances, I hold that the clubbing of service provided by Balaji Construction (Prop. Balraj Malayyapa Besta) is vitiated and the same is set aside. The next ground urged is that threshold exemption have not been allowed to the appellant, as the appellant is a small contractor. So far this issue is concerned the matter is remanded back to the adjudicating authority to examine the allowability of the threshold limit as provided under the relevant notification and allow the same. So far the penalties are concerned, I find that there is reasonable cause for not making compliance with the provisions of the Act and the Rules. The contention of the appellant have not been found wrong that he was not aware being uneducated and engaged in labourer oriented job. Accordingly, I set aside the penalty imposed under Section 77 and 78 of the Finance Act. The penalty under Section 76 have already been set aside by the learned Commissioner (Appeals). Thus with these observations the appeal is allowed in part and remanded to the adjudicating authority for deciding the availability of threshold exemption.
7. Thus, the appeal is allowed in part.
(Pronounced in open Court) (Anil Choudhary) Member (Judicial) Sp 5