Custom, Excise & Service Tax Tribunal
Thermax Instrumentation Ltd vs Pune I on 10 October, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: ST/85054/2016
[Arising out of Order-in-Appeal No: PUN-EXCUS-001 dated 08/10/2015 passed by the Commissioner of Central Excise, Pune I.]
For approval and signature:
Honble Shri Ramesh Nair, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
No
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Thermax Instrumentation Ltd.
Appellant
Versus
Commissioner of Central Excise
Pune I
Respondent
Appearance:
Shri Vinay Jain, Chartered Accountant for the appellant Shri A.B. Kulgod, Asstt. Commissioner (AR) for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Date of hearing: 10/10/2016 Date of decision: 10/10/2016 ORDER NO: ____________________________ This appeal is directed against Order-in-Appeal No: PUN-EXCUS-001 dated 08/10/2015 passed by the Commissioner of Central Excise, Pune I whereby the learned Commissioner upheld the order-in-original No. PI/ADC/15/ADJ/103/2014 dated 16/12/2014 and dismissed the appeal filed by the appellant.
2. The fact of the case is that the appellant is engaged in providing the service of erection, installation and commissioning. In respect of one project of M/s Meenakshi Energy Pvt Ltd they opted for composite scheme under works contract vide letter dated 11/03/2010. Thereafter, vide letter dated 22/03/2010 the option for payment of service tax under composite scheme was withdrawn. The appellant have discharged service tax without availing the composite scheme and claiming abatement of 67% in terms of notification 1/06-ST. A show cause notice was issued for demanding service tax on the difference of service tax payable as per composite scheme and actually paid by them on the ground that once the option for composite scheme has been availed, the appellant cannot withdraw from the said composite scheme. Therefore the appellant was liable to pay service tax under the composite scheme only.
3. The adjudicating authority confirmed the demand and the same was upheld by the Commissioner (Appeals). Therefore, the appellant is before us.
4. Shri Vinay Jain, learned Chartered Accountant appearing on behalf of the appellant submits that though the appellant initially opted for payment of service tax under the composite scheme but immediately after ten days, on23/03/2010 by letter dated 22/03/2010, withdrawn their option and decided to discharge the service tax under the normal provision under which abatement of 67% was availed and service tax was paid on the 33% of the gross value. He further submits that this option of composite scheme and withdrawal thereof was made before the execution of the project as well as payment of first installment of service tax. He submits that as per sub-rule (3) of the Works Contract Rules 2007 the option has to be exercised prior to payment of service tax. In the present case, though the option was exercised before payment of service tax but the withdrawal was also made prior to payment of service tax. Therefore, there cannot be any objection for such withdrawal. As regards, limitation, he submits that the option of composite scheme and intimation of withdrawal of the same was given on 11/03/2010 and 22/3/2010 respectively. With these two letters, the entire fact that the appellant is intending to pay service tax not as per the composite scheme but as per the service tax payable on the erection, installation and commission service was disclosed. The service tax was paid as per their intimation given to the department on 23/03/2010. However, the show cause notice was issued on 02/04/2014, which is much after the prescribed time limit of one year. Therefore, the show cause notice is time-barred.
5. Shri A.B. Kulgod, Asstt. Commissioner (AR) appearing on behalf of Revenue reiterates the findings of the impugned order. He further submits that as per Rule 3(3) of Works Contract Rules 2007, the option for payment of service tax under the Works Contract Act is to be exercised before payment of service tax and once it is opted the same cannot be withdrawn until the completion of such contract. In the present case, the appellant opted for composite scheme before payment of service tax. Therefore, as per the provisions of the said rule they were not supposed to withdraw from the option for composite scheme. He place reliance on the decision of this Tribunal in Sunraj Construction v. Commissioner of Central Excise & Customs, Nagpur [2016 (42) STR 395 (Tri.-Mumbai)].
6. I have carefully considered the submissions made by both the sides. On going through the entire facts of the case I am of the view that the case can be disposed off on the ground of limitation.
7. I find that the appellant has opted for the composite scheme under works contract on 11/03/2010 and thereafter on 22/03/2010 they submitted a letter for withdrawal of the composite scheme. As per these two letters they have discharged the service tax during the period 2010-11. In view of these facts the show cause notice should have been issued within the normal period of one year as prescribed under section 73(1), whereas the show cause notice for the period 2010-11 was issued on 02/04/2014 i.e. after prescribed limit of one year. As per the above fact, there is no suppression of fact on the part of the appellant. Therefore, the demand raised in the show cause notice is clearly time-barred.
8. I, therefore, set aside the impugned order and allow the appeal on time bar, without going into the merit of the case.
(Dictated in Court) (Ramesh Nair) Member (Judicial) */as 5 5