Custom, Excise & Service Tax Tribunal
Bansal Brothers Through Shri Vijay ... vs Cgst & Ce Agra on 16 October, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT No.II
Service Tax Appeal No.70739 of 2018
(Arising out of Order-in-Appeal No.182/ST/Appeal/Audit/LKO/2018 dated
27/03/2018 passed by Commissioner (Audit) Central Goods & Services Tax,
Lucknow)
M/s Bansal Brothers,
Through Shri Vijay Kumar Bansal, Proprietor.....Appellant
(11-C, Govind Nagar, Mathura-281003)
VERSUS
Commissioner of Central Excise &
Service Tax, Agra ....Respondent
(7-Havelock Road, Lucknow)
APPEARANCE:
Ms Vanashri Dubey, Advocate for the Appellant
Shri Santosh Kumar, Authorised Representative for the Respondent
CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
HON'BLE MR. ANGAD PRASAD, MEMBER (JUDICIAL)
FINAL ORDER NO.70742/2025
DATE OF HEARING : 18 July, 2025
DATE OF PRONOUNCEMENT : 16 October, 2025
SANJIV SRIVASTAVA:
This appeals directed against Order-In-Appeal No.:
182/ST/Appeal/ Audit/ LKO/ 2018 dated 27.03.2018 of
Commissioner (Audit) Central Goods & Services Tax And Central
Excise Lucknow, to whom Central Board of Excise and Customs
in exercise of powers conferred under Rule 3 of Central Excise
Rules 2002, Rule 3 of the Service Tax Rules 1994 and Section
174(2)(e) of Central Goods & Services Tax Act 2017, read with
Notification No. 26/2017 (CE-NT) dated 17.10.2017 vide order
No. 09/2017 dated 16.11.2017 issued vide F. No. 137/13/2017-
Service Tax Appeal No.70739 of 2018
2
Service tax has assigned the appeal cases. By the impugned
order appeal filed against the Order-in-Original No.
34/Adj/ST/2017 dated 28.02.2017 of Deputy Commissioner,
Central Excise & Service Tax, Division Aligarh has been
dismissed
2.1 Appellant is having Service Tax Registration No.
ABNPB5282DSD001 w.e.f. 08.08.2012 and engaged in providing
the services of Work Contract Services' which is taxable under
Section 65(105)(zzzza) of the Finance Act, 1994 (hereinafter
referred to as 'the Act') upto 30.06.2012 and thereafter w.e.f.
01.07.2012 falling under the definition of Service tax as being
defined under Section 65B(44) of the Act and clause (h) of
Section 66E, thus service tax is liable to be collected by the
Central Government as per the provisions of Section 66B and
66BA of the Act.
2.2 The appellant was engaged in providing services to
Mathura Vrindavan Development Authority (MVDA), Senior Asstt.
Financial Advisor (Construction) NCR, L&T Ltd. (under sub-
contract for Jal Sansthan), Indian Oil Corporation Ltd, and Shri
Brij Housing and Developers (Brij Housing.
2.3 Acting on the information/ intelligence that appellant was
not discharging the service due properly, investigations and
enquiries were initiated against the appellant .
2.4 During the course of investigation the records were called
for from the appellant and his statement was also recorded
2.5 On the basis of the documents and statement of the
appellants it was found that
appellant has short paid service tax as calculated in the
table below on the service provided to M/s Indian Oil
Corporation Limited (IOCL) of "Horticulture jobs in GR
Township including Administrative Building & Green belt",
"Repair and Maintenance of Civil Works", "Repair of
Bachelor Hostel" etc;
Financial Service Receipt Taxable Service Tax Service Tax
Year as per 26 Value Payable
Service Tax Appeal No.70739 of 2018
3
AS Total By Paid Short
Service Paid
Provider
2010-11 Work 16224590 15582587 642003 642003 0 642003
Contracts 5216371 5009961 206410 206410 0 206410
2011-12
2012-13 2421111 2307050 114061 114061 131568 256850
(Apr-
Jun)
2012-13 7761448 7395800 365648 182824
(Jul-
Mar)
2012-13 Repair & 2298962 2115893 183067 91534
(Jul- Maintenance
Mar)
2013-14 21794825 20059295 1735530 867765 946176 0
2014-15 17439233 16050540 1388693 694346 577168 117178
Total 1222441
appellant had not paid service tax on the services provided
to Mathura Vrindavan Development Authority (MVDA),
Mathura, M/s L & T and Shri Brij Housing & Developers, as
detailed in table below:
Financial Receipt as per 26AS Taxable Rate of Service Tax Payable
Year u/s 194C Value Service
Name Amount Tax Recipient Provider
2010-11 MVDA 32441427 31157729 4.12% 0 1283698
L&T 5351812 5140042 4.12% 0 211770
2011-12 MVDA 43018097 41315883 4.12% 0 1702214
L&T 1637438 1572645 4.12% 0 64793
2012-13 MVDA 4303702 4100951 4.94% 0 202751
(Apr-
Jun)
2012-13 MVDA 2373829 2261996 12.36% 55917 55917
(Jul- Brij 1850000 1762845 12.36% 43578 43578
Mar) Housing
2013-14 MVDA 884696 843017 12.36% 20839 20839
Total 3585560
the appellant had calculated his service tax liabilities under
the Composition Scheme of Works Contract and paid the
same from the date of taking registration of Service Tax
and also admitted that the services provided before the
registration also falls under the category of 'Works
Contract' and thus liable to Service Tax.
during the financial year 2010-11 to 2014-15 the appellant
provided the taxable service of Work Contract Services and
have received payments in lieu of the services provided by
Service Tax Appeal No.70739 of 2018
4
them but they failed to pay the service tax to the
department.
during the investigation and after pursuance of the
Department, the party deposited Service Tax amount of
Rs.3,92,150/- vide Challan. No.4 dated 21.09.2015 against
their admitted liability.
2.6 A Show cause notice dated 21.10.2015 was issued to the
appellant to show cause as to why:-
(i) Service Tax total amounting to Rs.48,08,001/-
(including Cess & S.H.E.Cess) [Rupees Forty Eight
Lakhs Eight Thousand and One only) short paid/not
paid for the period 2010-11 to 2014-15 should not
be demanded and recovered from them under
proviso to Section 73(1) of the Finance Act,1994 and
as to why the amount of Rs.3,92,150/- deposited by
the noticee against heir admitted Service Tax liability
should not be appropriated against the Service Tax
demand made herein.
(ii) Interest at the appropriate rate for the relevant
period till the payment of the Service Tax should not
be demanded and recovered from them under the
provisions of Section 75
(iii) Late Fees for late filing of the ST-3 returns as per
provisions of Section 70 of the Act read with Rule 7C
of the Service Tax Rules, 1994 should not be
imposed upon them.
(iv) Penalties should not be imposed upon them under
Section 77(1)(a), 77(1)(b), 77(1)(c) discussed
supra. and 77(2) of the Act ibid for contravention of
various provisions of the Act and the Rules made
there under as discussed supra.
(v) Penalty should not be imposed upon them under
Section 78 of the Act ibid for the reasons discussed
above.
Service Tax Appeal No.70739 of 2018
5
2.7 The show cause notice was adjudicated as per the order in
original referred in para 1 above, holding as follows:
a. I confirm the demand of Service Tax including all cesses
amounting to Rs.44,87,860.00 (Rupees Forty Four Lakh
Eighty Seven Thousand Eight Hundred Sixty only) and
order for its recovery from M/s. Bansal Brothers, Prop.
Shri Vijay Kumar Bansai, House No. 11-C, Govind
Nagar, Mathura under proviso to Section 73(1) of the
Finance Act, 1994. I also order to appropriate the
Service Tax amounting to Rs.3,92,150/-(Rupees Three
Lakh Ninety two Thousand One Hundred Fifty only)
deposited by the party against the above said confirmed
demand;
b. I drop the demand of Rs.3,20,141/-(Rupees Three
Lakhs Twenty Thousand and one hundred forty one
only) as discussed in the forgoing Para's.
c. I confirm the demand of interest at the appropriate rate
for the relevant period till the payment of Service Tax
as confirmed here-in-above and order for its recovery
from M/ s. Bansal Brothers, House No.11-C, Govind
Nagar, Mathura, under Section 75 of the Finance Act,
1994;
d. I impose a penalty of Rs.44,87,860 /- (Rupees Forty
Four Lakh Eighty Seven Thousand Eight Hundred Sixty
only) upon M/s. Bansal Brothers, House No. 11-C,
Govind Nagar, Mathura, under Section 78 of the Finance
Act, 1994 as discussed in the forgcing Para's;
e. I also impose/demand Late Fee for amounting to
Rs.1,00,000/- upon M/s. Bansal Brothers, House No.
11-C, Govind Nagar, Mathura, for non filling of five ST-3
returns as per provisions of Section 70 of the Act read
with Rule 7C of the Rules, as discussed in the forgoing
Para's;
f. I also impose a penalty of Rs.10,000/- (Rupees Ten
Thousand only) upon M/s. Bansal Brothers, House No.
11-C, Govind Nagar, Mathura, under Section 77(2) of
Service Tax Appeal No.70739 of 2018
6
the Finance Act, 1994. And drop the penalties under
Section 77(1)(a), 77(1)(b), 77(1)(c), of the Finance
Act, 1994-as discussed in the forgoing paras;
2.8 Aggrieved appellant filed the appeal before the
Commissioner (Appeal) which has been dismissed as per the
impugned order.
2.9 Aggrieved appellant has filed this appeal.
3.1 We have heard Ms Vanashri Dubey, Advocate for the
appellant and Shri Santosh Kumar, Authorized Representative
for the revenue.
3.2 Arguing for the appellant counsel submits:
the services provided to M/s IOCL (Horticulture and supply
of sand) and MVDA are taxable services is based on wrong
factual
the supplies of sand to IOCL vide W.O. No. 23741408 and
W.O. No. 17814589 are not liable to service tax.
Appellant provided the Horticulture services to M/s IOCL at
locations other than the factory premises i.e. GR Township,
these are not liable to service tax.
construction of residential houses for Poor Persons under
IHSDP are constructed under JNNURM scheme therefore,
in view of exemption notification No. 28/2010-ST dated
22.06.2010 and further notification No. 25/2012-ST dated
20.06.2012 SI.No. 13 are exempted from service tax.
the services provided to MVDA in relation to the housing
projects under Shri Kanshiram Ji Sahkari Gareeb Awas
Yojana is squarely under S.No. 12 of the Notification No.
25/2012 S.T as much as MVDA is a governmental authority
and the construction done for it is specifically exempt
under the said exemption notification.
the housing projects of MVDA are constructed with a not-
for-profit motive and hence would be classified as original
work meant predominantly for the use other than
commerce, industry or any other business or profession.
Service Tax Appeal No.70739 of 2018
7
the issue is squarely covered by the judgement of Hon`ble
Punjab and Haryana High Court in M/s Bharat Bhushan
Gupta and Company y/s State of Haryana and others.
allegation of deliberately and knowingly suppression of
material facts from the department with a malafide
intention to evade payment of service tax is purely
unrealistic and illusionary.
The appellant is regular in filing of service tax returns and
depositing service tax thereby making due compliances.
The appellant being a law abiding citizen have fulfilled all
possible tax compliances, there cannot be any suppression
with intent to evade the tax as has been alleged in the
impugned order-in-original.
action of levying interest under Section 75 and penalty
under Section 70, 77(2) and Section 78 of the Act is not
admissible and valid.
penalties under the Act is not automatic and there should
be mens rea or guilty state of mind for imposition of
penalties.
adjudicating authority failed to appreciate the fact that the
appellant had not suppressed any information from the
department with the intention to evade payment of service
tax and has neither defaulted in payment of service tax.
appellant had always supported in the enquiry proceedings
initiated by the department and had submitted all the
relevant documents with the department from time to
time.
on becoming aware of the service tax liability, appellant
deposited Rs. 3,92,150/-.
There is no malafide intention on the part of the appellant
and hence, extended period of limitation cannot be
invoked.
3.3 Authorized Representative reiterated the findings recorded
in the impugned order.
Service Tax Appeal No.70739 of 2018
8
4.1 We have considered the impugned order along with the
submissions made in appeal and during the course of arguments.
4.2 Impugned order records the findings as follows:
"I have gone through the order-in-original, grounds of
appeal, submissions of the appellant at the time of
personai hearing and facts on record. I find that the crucial
issue involved in the case is whether appellant was liable
to pay Service Tax on the gross amount received in lieu of
providing services of Work Contract Services and Repair
and Maintenance Services as alleged in the Show Cause
Notice.
The issues - wise discussion are as under:
1. Services provided to M/s India Oil Corporation
(IOCL):-
On this issues the appellant as submitted that the services
provided to M/s IOCL in respect of Horticulture job are
liable to service tax. The adjudicating authority has
discussed the issue in para 40 of the order in original and
as per facts of the case the work order is for the work of
horticulture job in GR Township including administrative
buildings and green belt that as per documents the work
was awarded by M/s IOCL refinery for the purpose of
maintenance of garden/ tree plantation and to develop the
adequate green belt inside the premises to control noise
pollution created by the refinery. The nature of the service
rendered by the appellants are in respect of commercial
activity on this issue i agree with the observation made by
the adjudicating authority that the exemption the benefit
of the exemption from service tax cannot be extended to
the appellants. The observation of the adjudicating
authority finds force from the case laws quoted by the
adjudicating authority wherein the Hon`ble Tribunal has
allowed the CENVAT Credit of Service Tax paid by the
parties on these services the reasonable inference from
these case laws cited by the adjudicating authority can be
Service Tax Appeal No.70739 of 2018
9
drawn that the service was found to be taxable and service
was paid by the parties and they had approached tribunal
for the purpose of availment of cenvat credit paid by them
on these services therefore, I hold that the order passed
by the adjudicating authority confirming the demand of
service tax needs no interference.
In their defence the appellant has submitted that they
have supplied sand vide Work Order No. 23741408.
However, the supply of sand was for cable trenches
therefore, it is a part of the work contract service and it
can be treated as a separate contract for supply of the
material. Further, it is a part of composite contract and
cannot be treated separately. Therefore, the plea of the
appellant is mis-leading cannot be accepted.
2. Services provided to M/s Mathura Vrindavan
Development Authority :-
On this issue the appellant submitted that the services
provided to M/s Mathura Vrindavan Development Authority
are exempt by virtue of Sl.No. 14(c) of the Notification No.
25/2012-ST dated 20.06.2012 and quoted the provisions
of said notification.
The issue has been discussed by the adjudicating authority
in para 41, 41.1 and 41.2 of the order in original wherein
the adjudicating authority has discussed that service
provided to MVDA by the appellant are taxable or not. The
Adjudicating authority has observed that the appellant has
not furnished_ any evidence to prove that the said project
is approved by the competent authority under the said
scheme. Therefore, the adjudicating authority has
disallowed the exemption claimed by the appellant. In the
grounds of appeal they have submitted that the services
have been provided to the Government and they are
entitling for exemption under SI.No. 12A of exemption
Notification No. 25/2012-ST dated 20.06.2012. Here also
that the appellant have failed to give any documentary
Service Tax Appeal No.70739 of 2018
10
evidence to prove that the said project was approved by
the competent authority empowered under the scheme of
affordable housing in partnership framed by the Ministry of
Housing and Urban Poverty Alleviation, Government of
India. The appellant has claimed exemption under
Notification No. 25/2012-ST dated 20.06.2012 SI.No. 13 of
the said exemption read as under :-
"13. Services provided by way of construction, erection,
commissioning, installation, completion, fitting out repair,
maintenance, renovation, or alteration of, -
(a) ....
(b) a civil structure or any other original works
pertaining to a scheme under Jawaharlal Nehru
National Urban Renewal Mission or Rajiv Awas
Yojana"
The appellant have failed to given any documentary
evidence that the said project was for Rajiv Awas Yojana.
Therefore, in absence of non fulfillment of conditions the
exemption can not extended to the appellant. Moreover,
the appellant himself is not sure about the claim of the
exemption Notification the appellant are changing their
stand in respect of claim of exemption because at one
point of time they have claimed exemption under SI.No.
12 of the Notification and also 14 of the Notification before
the original adjudicating authority and now in their
additional defence submission under SI.No. 13 of the said
Notification. Therefore, the exemption benefit in absence
of documentary evidence that the scheme was under
JNNURM can not be extended.
In the case of Commissioner of C.Ex. & Cus, Indore v/s
Parenteral Drugs (I) Ltd. - 2009(236)ELT.625(S.C.) -
Hon'ble Supreme Court has held in para 8 of the
judgement that - "Exemption notifications to be
interpreted strictly - Burden on assessee to prove that the
Service Tax Appeal No.70739 of 2018
11
item falls within four corners of exemption notification -
Section 5A of Central Excise Act, 1944."
As regards imposition of the penalty under Section 78 of
the Act, I agree with the findings adjudicating authority
that the party have deliberately suppress the gross receipt
against the provisions of taxable services and have not
obtained services tax registration within stipulated time
they have also not of paid service tax during the impugned
period that it was a willful attempt to evade payment of
service tax. Therefore, they are liable for penal action
under Section 78 of the Act. That Hon'ble Supreme Court
has settled the issue in the case of UOI of v/s Dharmendra
Textiles Processors [2008(231)ELT 3(S.C.)], wherein it was
pronounced that the present of malafide intention is not
relevant for imposing penalty and mensrea is not an
essential ingredient for penalty for tax delinquency which
is a civil obligation. Hence, I upheld the penalty imposed
by adjudicating authority under Section 78 of the Act.
As regards penalty imposed by the adjudicating authority
under Section 72(2) of the Act Rs. 10,000/- and late fees
of Rs. 1,00,000/- under Section 70 read with Rule 7C of
the Act I agreed with the findings of the adjudicating
authority and penalty imposed are upheld."
4.3 Undisputedly demand made in respect of the services
provided by the Appellant to M/s L & T, Brij Housing have been
dropped by the adjudicating authority. The demand has been
confirmed only in respect of the services provided to MVDA and
M/s IOCL.
4.4 During the investigation certain work orders in respect of
the service provided by the appellant to M/s IOCL were provided.
Summary of these work orders, to determine the service being
provided by the appellant in terms of these work orders is
available in para 8 of SCN and is reproduced below:
(a) W.O No 17814589 dated 15.09.2008 of M/s. IOCL,
Gujarat Refinery: the nature of work to be executed is
Service Tax Appeal No.70739 of 2018
12
termed as Horticulture jobs in GR Township including
Administrative Buildings & Greenbelt; Scheduled time
period for completion of the work is 01 year and the value
of work includes all taxes and charges, except Service
Tax. The Service Tax as applicable shall be paid by IOCL
as per tender
(b) W.O. No.23472655 dated 17.10.2011 of M/s. IOCL,
Mathura Refinery, Mathura: the nature of work to be
executed is termed as Construction of Emblem/
Monogram structure in the main lawn of MJPL, Mathura;
Scheduled time period for completion of the work is till
30.11.11and the value of work includes all taxes and
charges
(c) W.O. No.23479701 dated 25.10.2011 of M/s. IOCL,
Mathura Refinery: the nature of work to be executed is
termed as Repair & Maintenance of Civil Works in ETP,
SRU, MSQ, Eco-Park, Bitumen Tank Farm and LPG area in
SR-8 at Mathura Refinery; Scheduled period for
cơmpletion of work is notified as 23 months; the value of
work is including Service Tax.
(d) W.O. No.23482838 dated 02.11.2011 of M/s. 1OCL,
Mathura Refinery: the nature of work to be executed is
termed as Repair & Maintenance of Civil Works in New
Unit, Hydrogen Bullet, Central Stores, Water Block and
Flare area at Mathura Refinery; Scheduled period for
completion of work is notified as 23 months; the value of
work is including Service Tax
(e) W.O. No.23619631 dated 12.05.2012 of M/s. IOCL,
Mathura Refinery: the nature of work to be executed is
termed as Repair & Maintenance of Civil Works of
Residential Quarters and various public buildings of
Mathura Refinery Nagar Part-B; Scheduled period for
completion of work is notified as 24 months; the value of
work is including Service Tax.
(f) W.O. No.23672094 dated 30.07.2012 of M/s. IOCL,
Mathura Refinery: to be executed is termed as Repair &
Service Tax Appeal No.70739 of 2018
13
Maintenance of Civil farm area at Mathura Refinery;
Scheduled period for completion of work is notified as 23
months; the value of work is including Service Tax.
(g) W.O. No.23741408 dated 09.11.2012 of M/s. IOCL,
Mathura Refinery: the nature of work to be executed is
termed as Supply of Sand for the cable trenches of Old
Units in SRB at Mathura Refinery; Scheduled period for
completion of work is notified as 02 months;
(h) W.O. No.23789443 dated 24.01.2013 of M/s. IOCL,
Mathura Refinery: the nature of work to be executed is
termed as Renovation of two blocks (40 units) of Bachelor
Hostel (BOH) at Mathura Refinery Nagar; Scheduled
period for completion of work is notified as 061 months;
the rate of Service Tax reimbursable @ 7.416%.
(i) W.O. No.24255523 dated 23.09.2014 of M/s IOCL,
Mathura Refinery: the nature of work to be executed is
termed as Repair & Maintenance of Civil Works in New
Unit, Hydrogen Bullet, Central Stores, Water Block and
Flare area at Mathura Refinery Scheduled period for
completion of work is notified as 06 months; the rate of
Service Tax reimbursable @7.416%.
4.5 Appellant do not dispute the leviability of service tax in
respect of these work order except for work order in respect of
horticulture services and the work order for supply of sand.
4.6 In respect of the work order in respect of horticulture
services, appellant submits that these services were provided at
location other than the factory premises of the service recipient
and hence cannot be subjected to service tax. We do not find
any merits in the said argument of the appellant. The service tax
if leviable as per the Finance Act, 1994 (as amended from time
to time) is to be paid if not exempted specifically. Appellant has
not produced any exemption notification to show that during the
relevant period these services if provided at locations other than
the factory premises are exempt from payment of service tax.
Order in original referred to following orders wherein it has been
Service Tax Appeal No.70739 of 2018
14
held that the service tax paid on the horticulture services will be
admissible as CENVAT Credit
Maruti Suzuki India Ltd [2015 (38) STR 503 (T-Del)]
Hero Honda Motors Ltd. [2014 (34) STR 54 (T-Del)]
ABI Showa Tech India Ltd. [2016 (41) STR 912 (T-
Chennai)
4.7 We also note that the demand in respect of the
Horticulture Services in terms of Work Order No 17814589 dated
15.09.2008, is for the period prior to introduction of Negative
List regime for levy of service tax. At that time the service tax
was leviable only on services defined as taxable services by the
Finance Act, 1994. It is settled law that for the purpose of levy
of service tax prior to the 01.07.2012, it was necessary to
determine the classification of service rendered. We find that
neither show cause notice, nor the order in original or even the
impugned order have even made an attempt to determine the
classification of these services, amongst the services notified as
taxable service by the Finance Act, 1994. In absence of any such
classification we find that the entire proceedings are vague and
like fishing exercise. In case of Ess Gee Real Estate Developers
Pvt. Ltd [2020 (34) G.S.T.L. 486 (Tri. - Del.)] following has been
held:
"23. The show cause notice is vague as it does not
specify which particular category of service was leviable to
tax as it states that "service tax appears to be leviable as
per the statutory provisions on real estate developed by
site preparation on consideration basis". The earlier portion
of paragraph 8 of the show cause notice mentions that the
developer in the capacity of a real estate agent rendered
services of site formation for developing the real estate
which was ultimately sold by the developer on pre-
determined commission. It is very difficult to really cull out
from the show cause notice as to which particular category
of service was intended to be taxed. The show cause
notice should have clearly indicated whether the service of
Service Tax Appeal No.70739 of 2018
15
"real estate agent" or "site formation" was leviable to tax,
for this is the requirement of Section 65A of the Act. This
confusion is maintained in the impugned order. After
referring to the provisions of the agreement dated 5th
September, 2001, the Commissioner in paragraph 22 of
the order finds that the service rendered by the appellant
is of "site formation" as defined in Section 65(97a) of the
Act. In paragraph 23, the Commissioner also finds that the
service rendered by the appellant is of "real estate agent"
as defined in Section 65(88) of the Act. It is for this reason
that in paragraph 24 of the order, the Commissioner
observed that it was a composite agreement in which the
developer has provided the two services to the land owner
the first service is "site formation" and the second is "real
estate agent". In the last sentence of the paragraph the
Commissioner observed "I also find that both the services
are taxable and there is no need to bifurcate the
consideration service wise." It was obligatory for the
Adjudicating Authority to have specifically classified the
service under which service tax was to be levied. The
impugned [order], therefore, for this reason alone needs
to be set aside."
4.8 In terms of the Work Order No 23741408 dated
09.11.2012, appellant was supplying sand to M/s IOCL Mathura
Refinery. Service Tax has been demanded on the same.
Impugned order records that this supply is part of certain work
contract order without specifying which work contract order, has
this supply been effected. Lower authorities should have
determined exactly as to what work contract order was being
executed by the appellant against which this sand was supplied.
In absence of any such finding, we find that the supply of sand
was nothing but supply of goods and could not have been
subjected to service tax.
4.9 Thus in respect these two Work Orders namely Work Order
No 17814589 dated 15.09.2008 & Work Order No 23741408
Service Tax Appeal No.70739 of 2018
16
dated 09.11.2012 we do not find any merits in the demand
made.
4.10 Now coming to the demand made in respect of the services
provided to MVDA. We observe that the show cause notice
records as follows:
"12. The party has also rendered services to M/s Mathura
Vrindavan Development Authority, Mathura (hereinafter
referred to as 'MVDA') for construction of 256 Houses
under Shri Kanshiramji Gareeb Awas Yojna awarded on
23.10.08, construction of 160 Houses under Shri
Kanshiramji Gareeb Awas Yojna awarded on 07.07.2010,
construction of 96 EWS Houses awarded on 06.10.2009
and construction of 144 EWS Houses awarded on
19.07.2010
13.1 A contract has been awarded to notice by the MVDA
for the construction of houses under the Project namely
Shri Kanshiramji Gareeb Awas Yojna and Economical
Weaker Section houses. On going through the Work Order,
it appears that the contract is a composite contract as all
the materials, labour, cost of consumables like electricity,
water, etc. are to be provided by the party for construction
of the said projects. The party in his statement dated
22.09.2015 admitted that they have constructed houses
for MVDA which were meant for sale to general public and
his version was endorsed on the website of MVDA, through
a "Shasanadesh" which stated "आवंटन की तिति से 03 साल में
भवन का तनमाा ण ... लाभािी द्वारा जमा की गयी धनराशी का 15 प्रतिशि
वातषाक क्षतिपूतिा आवंटी को दे य होगी," which clearly indicates that
the project undertaken by MVDA through the party is
purely commercial in nature. Further Notin.No.25/2012
dated 20.06.2012, the Central Government, being satisfied
that it is necessary in the public interest so to do, hereby
exempts the following taxable services leviable thereon
under section 66B of the said Act, namely:-
Service Tax Appeal No.70739 of 2018
17
S. No. 12. Services provided to the Government, a local.
authority or a governmental authority by way of
construction, erection, commissioning, installation,
completion, fitting out, repair, maintenance, renovation, or
alteration of -
(a) a civil structure or any other original works meant
predominantly for use other than for commerce,
industry, or any other business or profession;
(b) ......
(c) ......
(d) ......
(e) .....
(f) ......
SL. No.13. Services provided by way of construction,
erection, çommissioning, installation, completion, fitting
out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road
transportation for use by general public
(b) a civil structure or any other original works
pertaining to a scheme under Jawaharlal Nehru
National Urban Renewal Mission ar Rajiv Awaas
Yojana;
SL.N0.14. Services by way of construction, erection,
commissioning, or installation of original works
pertaining to,-
(b) a single residential unit otherwise than as a
part of a residential complex;
(c) low cost houses up to a carpet area of 60
square metres per house in a housing project
approved by competent authority empowered
under the 'Scheme of Affordable Housing in
Partnership‟ framed by the Ministry of Housing
and Urban Poverty Alleviation, Government of
India;
Service Tax Appeal No.70739 of 2018
18
13.2 It is evident from the work orders/ agreements
supplied by the party, that they rendered the services
of "Work contract service". mainly to the MVDA being a
City Developer providing comprehensive range of
services mainly to develop the acquired land for housing
for different segment for public and commercial
property for rent and on sale, scheme is not covered
under the definition of Government, Government
Authority or Local Authority and thus the Service Tax is
liable to be paid by the party on the services provided
to the MVDA. Further, there is no specific exemption to
the services provided to the MVDA, which could be
extended to the party against the services provided by
them to the MVDA as per S1.No. 12 of Notification
No.25/2012-ST dated 20.06.2012 as discussed above
i.e. the services provided to the Government, a local
authority or a governmental authority by way of
erection, commissioning, installation, completion, fitting
out. repair, construction. maintenance renovation, Or
alteration of a civil structure or any other original works
meant predominantly for ' use other than for
commerce, industry, or any other business or
profession. Since the services provided by the party are
not predominantly for use other than profession, the
services provided to the MVDA is not covered under the
business or provisions of Sl.No.12 of Notification
No.25/2012-ST dated 20.06.2012 for exemption from
service tax. Further, said construction of houses under
the scheme of Shri Kanshiramji Gareeb Awas Yojna and
Economical Weaker Section houses are also not covered
under the Sl.No. 13 of Notification No.25/2012-ST
dated 20.06.2012 and since the work orders does not
mention the carpet area of the said houses nor have the
party been able to prove that the said project is
approved by competent authority empowered under the
'Scheme of Affordable Housing in Partnership‟ framed
Service Tax Appeal No.70739 of 2018
19
by the Ministry of Housing and Urban Poverty
Alleviation, Government of India as has been
emphasized in S1.No.14 of the Notfn.No.25/2012-ST
dated 20.06.2012.
13.3 Whereas MVDA is a Autonomous body of Uttar
Pradesh Government which is engaged in business or
profession by way providing so many service and
activities and has already been excluded from the
purview of Negative List in terms of Section 66D of
Finance Act, 1994. Thus, the services provided by the
party to the MVDA also appears to be taxable under law
and Service Tax is liable to be paid by the party on the
services provided to MVDA."
4.11 Hon'ble Allahabad High Court of Allahabad has in the case
of Greater Noida Industrial Authority has observed as follows:
"31. As far as the circular dated 23rd August, 2007
issued by the Government of India, which has been so
heavily relied upon by the appellant is concerned, we may
record that under Clause 032.01, it has been provided that
the Prasar Bharati Corporation (Doordarshan and All India
Radio), which has been constituted under the Prasar
Bharati (Broadcasting Corporation of India) Act, 1990 is
liable to pay Service Tax for broadcasting services.
32. Similarly under Clause 999.01 with regard to the
sovereign/public duties/functions, it has been clarified that
activities assigned to and performed by the
sovereign/public authorities under the provisions of any
law are statutory duties. The fee or amount collected as
per the provisions of the relevant statute for performing
such functions is in the nature of a compulsory levy and
are deposited into the Government account. Such activities
are purely in public interest and are undertaken as
mandatory and statutory functions. These are not to be
treated as services provided for a consideration. Therefore,
such activities assigned to be performed by a
Service Tax Appeal No.70739 of 2018
20
sovereign/public authority under the provisions of any law,
do not constitute taxable services. Any amount/fee
collected in such cases are not to be treated as
consideration for the purposes of levy of Service Tax.
33. However, if a sovereign/public authority provides a
services, which is not in the nature of an statutory activity
and the same is undertaken for a consideration (not a
statutory fee), then in such cases, Service Tax would be
leviable as long as the activity undertaken falls within the
scope of a taxable service as defined.
34. Letting of immovable property for consideration,
which is determined on the basis of offers received from
public at large by the assessee Greater Noida Industrial
Development Authority is a service provided for
consideration and not on payment of statutory fees,
neither it is a statutory service performed by the assessee.
It may be that the statute permits such activities of letting
out of immovable property for augmenting its finances but
the same cannot be termed as the service in public
interest nor it is a mandatory or statutory functions of the
Development Authority. Accordingly such activity of leasing
do constitute a taxable service, in our opinion."
4.12 In case of Bharat Bhushan Gupta & Co [2016 (44) S.T.R.
195 (P & H)] (relied by the appellant) Hon'ble Punjab And
Haryana High Court has held as follows:
"4. Learned Counsel for the petitioner submitted that
the petitioner is a firm carrying on the business as a
contractor. It was awarded contract for construction of
flats for BPL category vide letter dated 26-8-2013. The
contract is nearing completion. As per the provisions of
Finance Act, 1994 and Notification No. 25/2012-S.T.,
dated 20-6-2012 issued by the Government, the service of
construction, etc., provided to the Government, a local
authority or a governmental authority is exempted from
payment of service tax. The words "governmental
Service Tax Appeal No.70739 of 2018
21
authority" have been defined in the same notification,
which was clarified later on vide Notification No. 2/2014-
S.T., dated 30-1-2014. The term "original works" has also
been defined in notification dated 20-6-2012. It was
further submitted that the Board has been created under
Haryana Housing Board Act, 1971 (for short, „the Act‟). It
is totally controlled by the Government. There is no private
participation. It is engaged in construction of houses for
the poor and for other customers as well. In addition to
Clause 12 of the notification dated 20-6-2012, it was
submitted that the petitioner may be entitled to exemption
even in Clause 14, which talks about construction of low
cost houses up to a carpet area of 60 square metres. In
the case in hand the construction of houses is for BPL
category, which are of a carpet area less than 60 square
metres.
5.It was further submitted that due to some error,
Clause 12(a), (c) and (f) was omitted from the notification
dated 20-6-2012 vide notification dated 1-3-2015 w.e.f. 1-
4-2015, however, vide Section 102 of the Finance Act,
2016, the exemption was restored again with retrospective
effect from 1-4-2015 till 29-2-2016, with reference to
three clauses, which were omitted from notification dated
20-6-2012. It was further submitted that after Entry 12 in
the notification dated 20-6-2012, Entry 12A was inserted
w.e.f. 1-3-2016 extending the exemption from payment of
service tax in terms of the previous provisions up to 31-3-
2020.
7.It was further submitted that the benefit of exemption
in terms of notification dated 20-6-2012, being effective
from 1-7-2012, the petitioners in most of the petitions
were awarded contract thereafter will not be liable for
payment of service tax, however, in some cases there is
some small period, which is prior thereto, for which the
petitioners have already paid the due tax or are availing of
Service Tax Appeal No.70739 of 2018
22
their appropriate remedy. The dispute in the present bunch
of petitions is only for the period from 1-7-2012 onwards.
Ever since the contract was entered into and the work was
being executed by the petitioner, neither the department
ever issued any notice to the petitioner nor the Board ever
asked for deposit of service tax. The petitioner was
aggrieved against the action of the Board in deducting the
entire amount of service tax even due for the previous
period from the running bills. The grievance is that the
petitioner being not liable to pay the tax, the action of the
Board in deducting the same from the bills of the petitioner
was totally un-called for. Further, it was submitted that in
the case of contractors, the liability to pay the service tax
is 50:50 on the service provider and the recipient. Even if
the clause in the contract is seen, the petitioner would be
liable to pay the service tax of his own share, whereas the
liability, if any, of the Board cannot be passed on to the
petitioner.
17.The service tax has been levied on various services
with amendments made in Finance Act, 1994. The services
on which the tax was levied were added from time to time.
Section 93 of the Finance Act, 1994 enables the Central
Government to exempt any service from payment of tax
by issuing a notification. Notification No. 25/2012-S.T.,
dated 20-6-2012 was issued stating therein that the
Government being satisfied exempts the taxable services
as enumerated in the notification from the whole of the
service tax leviable thereon. If Clause 12 of the notification
dated 20-6-2012 is analysed, exemption from taxation to
the services is provided to :
(i) Government, a local authority or a governmental
authority;
(ii) the kind of service being construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of;
Service Tax Appeal No.70739 of 2018
23
(iii) it is meant predominantly for use other than for
commerce, industry, or any other business or profession.
18."Original works" has been defined in Clause 2(y) of
the notification dated 20-6-2012 to mean the meaning as
assigned to in Rule 2A of the Service Tax (Determination of
Value) Rules, 2000.
19.On a plain reading of the notification dated 20-6-
2012, in our view, the service being provided by the
petitioners would clearly fall in the exemption clause, as
the Board is a governmental authority having been set up
under a State Act, i.e., Haryana Housing Board Act, 1971.
It is wholly controlled by the State Government. BPL
houses constructed by the petitioners are meant for
residential purpose and not for commerce, industry or any
other business or profession.
20.Similar issue came up for consideration before a
Division Bench of Patna High Court in Shapoorji Paloonji
and Company Pvt. Ltd.‟s (supra), where the contact was
for construction of administrative block in Indian Institute
of Technology set up under the Institutes of Technology
Act, 1961. Indian Institute of Technology was held to be a
governmental authority and the contract for construction
was opined to be falling in the exemption clause. The
notice issued for levy of service tax was quashed.
21.In view of our aforesaid discussion, it can safely be
opined that for the kind of contract entered into between
the petitioners and the Board, no service tax is leviable,
hence, the action of the Board in deducting part of the
service tax, though payable in the hands of the Board, if
tax is leviable, from the bills of the petitioners is declared
to be illegal.
4.13 We also note that all the work orders in respect of the
construction of the houses are dated prior to 01.07.2012, hence
we do not find any merits in the submissions made by the
appellant with regards to admissibility of exemption under
Service Tax Appeal No.70739 of 2018
24
notification No 25/2012-ST or on the reliance placed by the
appellant on this decision. From the facts of the case as recorded
in the table computing the demand appellant has received
following amounts post 01.07.2012 on which service tax demand
is meager as indicated in table below:
Financial Year Receipt Service Tax Demanded
2012-13 (Jul-Mar) 2373829 55917
2013-14 884696 20839
Total 3258525 76756
Hon'ble Punjab and Haryana High Court in the above case was
concerned with payment of service for the period subsequent to
01.07.2012 and have concluded that service tax in respect of
these services was exempted as per notification No 25/2012.
4.14 In case of Ganesh Yadav [2017 (6) GSTL 428 (T-All)]
following has been held:
"3. Being aggrieved, the Revenue is in appeal before
this Tribunal. On the ground that the said service is
taxable under sub-clause (zzzza) of Section 65(105)
wherein it is provided as follows :-
"For the purpose of this sub-clause, „works contract‟ means
a contract wherein :-
(i) transfer of property in goods involved in the
execution of such contract is leviable to tax as sale of
goods, and
(ii) such contract is for the purposes of carrying out -
(c) construction of a new residential complex or a part
thereof......"
It is further contended by the Revenue that the Varanasi
Development Authority was the service receiver and the
construction was not for the personal use of party. The
party (respondent) was liable to pay Service Tax under
Works Contract Service. The respondent had himself
admitted that he was providing service of work contract to
Varanasi Development Authority. As such there was no
Service Tax Appeal No.70739 of 2018
25
dispute with regard to classification of the service
rendered. The respondent claimed exemption on the basis
of the nature of the project i.e. for construction of houses
under Manyavar Kanshi Ram Saheri Garib Avas Yojna, was
not acceptable under Notification No. 6/2011, dated 1-3-
2011 wherein exemption to construction of residential
complex and finishing and completion services thereto is
for specified projects, under "Works Contract Services".
The Notification specifically provides exemption to (a)
construction of new residential complex or part thereof, (b)
completion and finishing services of new residential
complex or partly thereof under Jawaharlal Nehru Urban
Renewal Mission and Rajiv Awas Yojana, from the whole of
the Service Tax leviable thereon. It is contended by the
Revenue that there is no specific exemption given to the
Government of U.P. for Manyavar Kanshi Ram Saheri Garib
Avas Yojna. It is further contended that activity of
constructing houses for economically weaker sections for
Varanasi Development Authority is taxable under the
category "Works Contract Service".
4.Heard the parties.
5.We find that the issue in itself is incorrect. Larger
Bench of this Tribunal in the case of Lanco Infratech Ltd. v.
CC, CE & ST - (2015) 38 S.T.R. 709 (Tri. - LB) has held
that such activity which was not taxable prior to 1-6-2007
under the category of Commercial and Industrial
Construction continue to be non-taxable under the
category of Works Contract Service from 1-4-2007. Further
we find that under similar facts and circumstances, a Co-
ordinate Bench of this Tribunal in the case of CCE v. Manoj
Kumar Singh Appeal No. ST/70135/2015 vide a stay order
dated 19-5-2016 was pleased to reject the stay application
filed by Revenue under the similar facts and circumstances
where the respondent Manoj Kumar Singh had constructed
civil structures, repairing, doing alteration, renovation or
Service Tax Appeal No.70739 of 2018
26
restoration of old structures, completing and finishing job,
installation of electrical and electronic devices, etc., under
contract and work orders of VDA, Varanasi. It was
observed that prima facie no service tax is leaviable on
construction of low cost housing. It is also apparent that
the flats constructed under the scheme are neither
intended for commerce or industry but for the welfare of
the weaker sections of the society. A reference was also
made to precedent decision in the case of ECP Housing
(India) Pvt. Ltd. v. Commissioner of Central Excise, Nasik
reported at 2013 (30) S.T.R. 703 wherein it was held that
the demand under commercial and industrial construction
for contract of construction divided into two parts of
construction of stadium and construction of shopping
complex around stadium held activity of construction of
sports complex/stadium cannot be termed as commercial
and industrial construction. We also agree with finding of
learned Commissioner (Appeals) holding that the activity
for constructing houses by the appellant for economically
weaker sections under works allotted by the Varanasi
Development Authority under the scheme of Government
of U.P., the activities is neither taxable under works
contract services nor under Construction of
Complex/Commercial or Industrial Construction Services
more particularly under the exclusion clause which
provides that construction classifiable under the category
of residential complex service does not include a complex
which is constructed by a person directly engaging any
other person for designing or planning of the layout, and
the construction of such complex is intended for personal
use as residence by such person and personal use have
been further explained as including or permitting the
complex for use as residence by another person on rent or
without consideration. Accordingly, we dismiss the appeal
of Revenue."
Service Tax Appeal No.70739 of 2018
27
4.15 This decision also do not decide the issue in hand. This
decision holds that Complex/Commercial or Industrial
Construction Services excludes the complex which is intended for
person use as residence by such person and personal use have
been further explained as including or permitting the complex for
use as residence by another person on rent or without
consideration. In the present case it is not evident that these
house being constructed for MVDA fulfilled the above
requirement. Show cause notice specifically states that the
houses were being sold against a consideration.
4.16 Appellant has claimed that the said service provided in
respect of construction of low cost housing are exempt from
payment of service as CBEC Circular No 80/10/2004 dated
17.09.2004 read along with Circular 123/5/2010-TRU dated
24.05.2010. We would like to point out that on CBEC website
there is no circular marked 80/10/2004 dated 17.09.2004. Might
be to counsel for appellant has generated the Circular No,
because circular No 80/1/2005 is dated 10.08.2005. Definitely
there is communication dated 17.09.2004, in which para 13.1
reads as follows:
13.1 Services provided by a commercial concern in relation
to construction, repairs, alteration or restoration of such
buildings, civil structures or parts thereof which are used,
occupied or engaged for the purposes of commerce and
industry are covered under this new levy. In this case the
service is essentially provided to a person who gets such
constructions etc. done, by a building or civil contractor.
Estate builders who construct buildings/ civil structures for
themselves (for their own use, renting it out or for selling
it subsequently) are not taxable service providers.
However, if such real estate owners hire
contractor/contractors, the payment made to such
contractor would be subjected to service tax under this
head. The tax is limited only incase the service is provided
by a commercial concern. Thus service provided by a
Service Tax Appeal No.70739 of 2018
28
laborer engaged directly by the property owner or a
contractor who does not have a business establishment
would not be subject to service tax.
By Circular No 123/5/2010-TRU dated 24.05.2010 following has
been clarified:
S.No. Activity Status
1. Shifting of overhead cables/wires for Not a taxable service under any
any reasons such as widening/ clause of sub-section (105) of
renovation of roads section 65 of the Finance Act,
1994
2. Laying of cables under or alongside Not a taxable service under any
roads clause of sub-section (105)of
section 65 of the Finance Act,
1994
3. Laying of electric cables between Not a taxable service under any
grids/sub-stations/transformer clause of sub-section (105)of
stations en route section 65 of the Finance Act,
1994
4 Installation of transformer/ sub- Taxable service, namely
stations undertaken independently Erection, commissioning or
installation services [section 65
(105] (zzd].
5. Laying of electric cables up to Not a taxable service under any
distribution point of residential or clause of sub-section (105)of
commercial localities/complexes section 65 of the Finance Act,
1994
6. Laying of electric cables beyond the Taxable service, namely
distribution point of residential or commercial or industrial
commercial localities/ complexes. construction' or 'construction of
complex' service [section65(105)
(zzq)/ (zzzh)], as the case may
be.
7. Installation of street lights, traffic Taxable service, namely
lights flood lights, or other electrical Erection, commissioning or
and electronic appliances/devices or installation services [section 65
providing electric connections to (105] (zzd].
them
8. Railway electrification, electrification Not a taxable service under any
along the railway track clause of sub-section (105)of
section 65 of the Finance Act,
1994
4.17 We are in the present case concerned with demand made
in respect of construction of 256 Houses under Shri Kanshiramji
Gareeb Awas Yojna awarded on 23.10.08, construction of 160
Houses under Shri Kanshiramji Gareeb Awas Yojna awarded on
07.07.2010, construction of 96 EWS Houses awarded on
06.10.2009 and construction of 144 EWS Houses awarded on
19.07.2010. Appellant is totally silent in respect of the issue in
dispute. The circular cited are not in respect of issues for which
this demand has been made. Appellant has never stated that
Service Tax Appeal No.70739 of 2018
29
this demand is made in respect of "Road Repair Construction for
MVDA and for repair construction of drain for MVDA. Further we
also note that contract in respect of
repairing of drain was approved on 25.10.2008, which was
to be completed by 26.02.2009.
construction of road from bus stand to Hindu Inter College
Nand Gaon Marg in Kosi Kalan was approved on
27.12.2007
strengthening of 100 wide Master Plan Road 18 mtr. Wide
and repairing of S W drain at Chaitanya Vihar I & II was
approved on 05.12.2008 and was to be completed by
30.04.2009
From the perusal of the above it is quite evident that all these
contracts are in respect of the work which were completed much
prior to period of demand and hence we are not in position to
consider these works done by the appellant in respect of the
services provided during the period of demand.
4.18 From the tender documents, submitted in respect of
Rukmini Vihar Yojana, it is evident that tender document do not
specify that these House are meant for free distribution to poor.
It only specifies that they are meant for low income group. We
do not find any evidence to show that these activities were taken
in respect of any scheme which falls under the category of
exempted scheme which has been approved in the manner
provided by the entry no 13 or 14 of the Notification No
25/2012-ST.
4.19 It is now settled law that it is for the person claiming any
exemption to show that he falls within the purview of the
exemption claimed. Hon'ble Supreme Court has in case of Dilip
Kumar & Company [2018 (361) E.L.T. 577 (S.C.)] held as
follows:
52. To sum up, we answer the reference holding as under
-
Service Tax Appeal No.70739 of 2018 30 (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.
(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.
(3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled.
4.20 Thus we do not find any merits in the submissions made by the appellant in respect of the services provided by them to MVDA.
4.21 Appellant have not contested the demand on limitation either in appeal or at the time of the argument. However, we find that the appellant had suppressed the receipts from the M/s IOCL and MVDA with intent to evade the payment of tax.
4.22 Order in original records as follows for invoking extended period of limitation, demanding interest and for imposition of penalty under Section 78 of the Finance Act, 1994 "44. The party submit that the extended period of limitation is not invokable against them in this case. This is not acceptable in view of the facts discussed in above paras. The party while providing taxable services did not get themselves registered with the department within one month of commencement of his business and got themselves registered late as on 08.08.2012. The party has also not filed five Nos. of periodical ST-3 returns for the period 2010-11 to 2012-13 (April-June). It was during the course of the enquiry conducted by the department that the facts of the case got un-earthed. This fact clearly makes me to hold that this is the case of deliberate Service Tax Appeal No.70739 of 2018 31 suppression and misrepresentation of facts with intention to evade payment of tax by the party, in as much as, the party had knowingly and willingly attempted to escape from payment of service tax. I have noticed that the government since beginning had placed full trust on the service providers so far service tax is concerned and accordingly, measures like self-assessments etc., based on mutual trust and confidence have been introduced. Further, a taxable service provider has not been required to maintain statutory or separate records under the provisions of Service Tax Acts/ Rules, as considerable amount of trust has been placed on the service providers and private records maintained by them for normal business purposes have been accepted for all the purposes of Service tax. All these operate on the basis of honesty of the service provider therefore, the governing statutory provisions create an absolute liability when any provision is contravened or there is a breach of trust placed on the service provider. Further bonafide intention cannot exist in thin air, but needs to be supported by positive action of the assessee. Here it is otherwise. From the evidence, it is clear that the party have not correctly assessed their taxable value. They also failed to declare the value in ST-3 Returns for the taxable services rendered by them, in as much as, they did not file the periodical ST-3 returns for the period 2010-11 to 2012-13 (April-June) and also did not pay proper service-tax at appropriate time due on the taxable service rendered by them by disregarding to the requirements of law and breach of trust deposed on them.
44.1. Thus, the facts discussed above clearly confirm that the party had deliberately and willingly not paid proper service tax with a motive to evade payment of service tax. Hence, in my opinion, the provisions for recovery of service tax for extended period in terms of proviso to the sub-section (1) of Section 73 of the Finance Act, 1994, have/ rightly been invoked in the matter. Accordingly, I Service Tax Appeal No.70739 of 2018 32 hold that the proviso-to Section 73(1) mentioned supra, has rightly been invoked for recovery of service tax. I therefore hold that the said charge of suppression of fact has rightly been proposed in the show cause notice and accordingly the provisions of extended period in terms of proviso to Section 73(1) of the Finance Act, 1973, are liable to invoked in the present matter.
44.2. After discussing the entire issues and recording the findings on each issue, I find in preceding paragraph that the party is liable to pay service tax on Work Contract & Repair & Maintenances under Work Contract provided bv them to M/s. IOC Ltd. and MVDA. Accordingly, I have calculated the service tax liability that is to be discharged by the party. applicable from time to The taxable amount after allowing abatement and service tax involved thereon at the rates time is Rs.44,87,860/- [Rs. 12,22,441 (IOC)+Rs.32,65,419 (MVDA)].
The amount on which service tax is not payable pertains to account of "Storm Water Drainage Work" during the financial year 2010-11 & 2011-12 from amount received on M/s L&T and also the amount received from M/s Brij Housing and Developers, Mathura for construction of individual residential house, which actually were not taxable services. The service tax involved on these non-
taxable amounts comes to Rs.3,20,141/-
(Rs.2,76,563(L&T)+Rs.43,578(Brij Housing)), the demand in respect of which is liable to be dropped. Thus, in light of the facts, I hold that out of total demand of Rs.48,08,001/- mentioned in the impugned notice, the demand of service tax of Rs.44,87,860/ - is liable to be confirmed, whereas the demand of service tax of Rs.3,20,141/- is liable to be dropped. Further in view of the above, I am inclined to hold that the charges levelled against the party in the show cause notice are proved. On perusal of the case laws cited and relied upon by the party Service Tax Appeal No.70739 of 2018 33 in their support, I have noticed that the same are not identical or relevant to the issue addressed, in the impugned notice therefore the amount of Rs. 44,87,860/- including Edu. Cess and SHE Cess) is liable to be confirmed under Section 73(1) (proviso) along witt applicable interest Section 75 of the Finance Act, 1994.
45. Further, on the question of payment of interest on such declared dues, I am of the opinion that the liability to pay the Service Tax has been confirmed against the party, then, there can be no immunity from Payment of appropriate interest on such Service Tax liability. I notice that it is an inbuilt provision that in the event of failure of timely payment of the tax amount into the credit of the Government exchequer, the same has to be paid alongwith the interest. I find that Hon'ble CESTAT in the case of Sree Vadivambigai Textile Mills Ltd. Vs. CCE [2005]1 STT 72(Chennai-CESTAT) held that "levy of interest under section 75 is mandatory and no leniency can be shown merely because appellant has been declared as a sick company". I also find that the Hon'ble CESTAT. in the case of INMA International Security Academy (P) Ltd. Vs. CCE [(2005)1 STT 31(Chennai-CESTAT] held that "the liability to pay interest at prescribed rates was inescapable as the law did not confer any discretion in the matter of levying interest." Therefore, in` view of the settled law, the party is required to pay the interest at the applicable rate under the provision of Section 75 of the Finance Act, 1994 on the amount of Service Tax, which they have failed to pay on due date, till its actual date of payment.
46. As regards proposal to impose penalty upon the party under Section 78 of the Finance Act, 1994, after considering the facts discussed in the foregoing paras, I am of the view that the immunity from penalty can be granted, only if the party had not deliberately acted in deliance of law. In this case, the facts abundantly suggest Service Tax Appeal No.70739 of 2018 34 that the party had deliberately suppressed the gross receipt against provision of taxable services and have not obtained service tax registration with in stipulated period and also not fled their ST-3 returns for the period from 2010-11 to 2012-13 (April-June). Further, the party has not paid Service Tax, due on the taxable service provided by them during the concern period, by deliberately withholding the crucial information, and did not disclose- the material facts to the department, which is nothing but a wilful attempt to suppress the facts with intent to evade payment of due Service Tax. It is on record that this detection of short payment/ non payment of Service Tax came into notice, on behest of the department who got conducted the enquiry against the party. The said short payment of Service Tax cannot be equated with the mere failure on the part of the party. It was rather an act of deliberate and gross indulgence to evade the Payment of Service Tax by the party. It is a fact on record that the party did not sought registration timely. These facts clearly confirm the party's intention to evade payment of Service Tax, and once, such intention gets proved, the presence of pre-requisite for imposition of penalty under Section 78 of the Finance Act, 1994 gets confirmed. This cannot be treated as mere ignorance on the part of the party. ...
As appellant has not stated anything against the above findings recorded in the order in original either before the first appellate authority or before us we uphold the said findings.
4.23 In view of discussions as above, we summarize our findings as follows:
a. Demand made in respect of M/s IOCL needs to be reworked out after reducing the receipts in respect of the work orders relating to supply of sand and horticulture services provided. b. Demand in respect of services provided to MVDA is upheld.
Service Tax Appeal No.70739 of 2018 35 c. Penalty under Section 78 is upheld but shall stand reduced by the amount of demand reduced in case of receipts of M/s IOCL.
d. Demand for interest under Section 75 and penalty imposed under Section 77 (2) is upheld. e. Late Fee imposed under provisions of Section 70 read with Rule 7C of The Service tax Rules, 1994 is upheld.
5.1 Appeal is partly allowed and matter is remanded to the Original Authority for requantifiaction of demand as indicated in para 4.23.
5.2 Matter to be decided in remand proceedings within three months from receipt of this order.
(Order pronounced in open court on-16 October, 2025) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) akp