Custom, Excise & Service Tax Tribunal
C.C.E. Chandigarh vs Pearl Buildwell Infructure Ltd. on 19 September, 2023
1 ST/1196,1238/2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
~~~~~
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No.1196 Of 2011
[Arising out of OIO No. 11/ST/CHD-I/2011 dated 25.03.2011 passed by the
Commissioner of Central Excise and Service Tax, Chandigarh-I]
M/s Pearls Buildwell Infrastructure Limited : Appellant (s)
SCO 76, Phase-IX, Mohali, Punjab
Vs
The Commissioner of Central Excise
And Service Tax, Chandigarh-I : Respondent (s)
Plot No. 19, Central Revenue Building,
Sector-17C, Chandigarh-160017
APPEARANCE:
Shri Ajay Jain, Advocate for the Appellant
Ms. Shivani, Authorised Representative for the Respondent
With
Service Tax Appeal No.1238 Of 2011
[Arising out of OIO No. 11/ST/CHD-I/2011 dated 25.03.2011 passed by the
Commissioner of Central Excise and Service Tax, Chandigarh-I]
The Commissioner of Central Excise
And Service Tax, Chandigarh-I : Appellant (s)
Plot No. 19, Central Revenue Building,
Sector-17C, Chandigarh-160017
Vs
M/s Pearls Buildwell Infrastructure Limited : Respondent (s)
SCO 76, Phase-IX, Mohali, Punjab
APPEARANCE:
Ms. Shivani, Authorised Representative for the Appellant
Shri Ajay Jain, Advocate for the Respondent
CORAM:
HON'BLE Mr. S. S. GARG, MEMBER (JUDICIAL)
HON'BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL)
2 ST/1196,1238/2011
FINAL ORDER Nos.60406-60407/2023
Date of Hearing: 29.08.2023
Date of Decision: 19.09.2023
Per: P.ANJANI KUMAR
M/s Pearls Buildwell Infrastructure Limited (appellants in
ST/1196/2011) are engaged in Construction Services related to road
laying. On receipt of an intelligence that the appellants have collected
service tax from their customers and have not deposited the same to
the exchequer; a show-cause notice, dated 23.04.2010, was issued
demanding duty of Rs.97,71,146.68/- along with interest while
seeking to impose penalty under Sections 76, 77 & 78 of Finance Act,
1994 and proposing to adjust Rs.10,20,994/- of duty and Rs.55,731/-
of interest already deposited by the Party. Learned Commissioner vide
the impugned order, dated 25.03.2011, confirmed demand of
Rs.10,24,928/- and the interest paid thereof and dropped the rest of
the demand. M/s Pearls Buildwell are in appeal against such
confirmation and Department is in appeal (ST/1238/2011) against the
demand dropped.
2. Shri Ajay Jain, Learned Counsel for M/s Pearls Buildwell
(appellants in Appeal No.ST/1196/2011 and respondents in Appeal No.
ST/1238/2011) submits that Headquarters' Preventive Team visited
their premises on 06.08.2008 and observed that they have
undertaken Site Formation Services taxable under Finance Act, 1994;
during the course of investigation, the appellants were made to
deposit Rs.10,24,928/-, which the appellants deposited under
3 ST/1196,1238/2011
"Protest" and have clarified vide letters dated 03.09.2008 and
06.10.2008 that they have not charged any service tax to their
customers.
3. Learned Counsel further submits that learned Commissioner has
analyzed the activity undertaken by the appellants; has gone through
the records of the case and came to the conclusion that the appellant
undertook the activity of construction of roads which is not liable to
service tax as per the exemption available in terms of Notification
No.17/2005 dated 07.06.2005. He submits that, thereafter, the
Commissioner goes on to confirm the demand in terms of Section 73A
of the Finance Act, 1994, though, giving a categorical finding that no
bill representing the availment of service tax has been raised. He
submits that entire findings of the Commissioner were based on few
calculation sheets found with the appellant during the search; learned
Commissioner has completely ignored the Certificate dated
12.06.2010 by their customers M/s PACL India Limited; during the
investigation stage itself, they have clarified to the authorities vide
letters dated 03.09.2008 and 06.10.2008 that they have not charged
any amount representing as service tax.
4. Ms. Shivani learned Authorized Representative for the
Department reiterates the findings of the impugned order as far as the
duty confirmed is concerned and reiterates the grounds of appeal in
respect of the portion of the demand dropped vide impugned order.
4 ST/1196,1238/2011
5. Heard both sides and perused the records of the case. We find
that brief issue involved in the instant case whether the provisions of
Section 73A are attracted in the facts and circumstances. We find that
it is beneficial to have a look at the provisions of Section 73A which is
extracted as under:
SECTION 1[73A. Service tax collected from any
person to be deposited with Central Government.
-
(1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government.
(2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government.
(3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government.
(4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined.
(5) The amount paid to the credit of the Central Government under sub-section (1) or sub-section (2) or sub-section (4), shall be adjusted against the service tax payable by the person on finalisation of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in sub-section (1).
(6) Where any surplus amount is left after the adjustment under sub-section (5), such amount shall 5 ST/1196,1238/2011 either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 (1 of 1944) or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount.
6. We find that, ongoing through the provisions of Section 73A that sub-clause 2 is applicable in the instant case. We find that to attract this clause, the noticee should have collected any amount, which is not required to be collected, in any manner as representing service tax. In the instant case, it is not the case of the Department that the appellants have issued invoices/ bills which indicate that service tax has been collected by the appellants from their customers. This fact is very much accepted by the learned Adjudicating Authority in the impugned order; the Certificate issued by M/s PACL indicates that the appellants have not charged any service tax to the customers. It is not clear from the case records whether the Department has challenged the certificate issued by M/s PACL. The allegation is sought to be established on the basis of loose calculation sheets. During the hearing, learned Counsel for the appellants has demonstrated that the said sheets cannot be corroborated with the invoices issued.
Moreover, the sheets are isolated and cannot be extrapolated to assume that service tax has been collected by the appellants. The facts of the case and the case records indicate that the appellants have not collected any amount representing as service tax from their customers i.e. M/s PACL. In addition to the above, there is a categorical certificate given by M/s PACL indicating that the appellants 6 ST/1196,1238/2011 have not charged any service tax and have not paid any amount representing as service tax to the appellants. Thus, we are of the considered opinion that the impugned order cannot be sustained and is liable to be set aside. We do so.
7. Learned Counsel further submits that audit has taken place in 2008 and the show-cause notice has been issued in 2010 and therefore, the issue is barred by limitation. As we find that the appellants have a strong case on merits, the issue of time bar is of no consequence.
8. In view of the above, Party's Appeal No.ST/1196/2011 is allowed and Department's Appeal No.ST/1238/2011 is dismissed.
(Pronounced on 19/09/2023) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK