Custom, Excise & Service Tax Tribunal
M/S.Nitson And Amitsu Pvt.Ltd vs Commissioner Of Service Tax, Kolkata on 11 July, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Stay Petition No.SP-801/11
&
Appeal No.S.T. 322/11
(Arising out of Order-in-Original No.68/COMM/ST/KOL/10-11 dated 31.03.2011 passed by the Commissioner of Service Tax, Kolkata.)
FOR APPROVAL AND SIGNATURE
HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL)
HONBLE DR. I.P. LAL, MEMBER(TECHNICAL)
1. Whether Press Reporters may be allowed to see
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
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Nitson and Amitsu Pvt.Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Service Tax, Kolkata
Respondent (s)
Appearance:
Shri Pulak Kr.Saha, C.A. for the Appellant Shri S.Chakraborty, A.C.(A.R.) for the Respondent CORAM:
Honble Dr. D.M. Misra, Member(Judicial) Honble Dr. I.P. Lal, Member(Technical) Date of Hearing:- 11.07.2013 Date of Pronouncement :- 11.07.2013 ORDER NO.S-455/KOL/13/A-192/KOL/13 Per Dr. D.M. Misra.
1. This is an application seeking waiver of pre-deposit of Service Tax of Rs.3,14,02,044/- and equal amount of penalty imposed under Section 78 of the Finance Act, 1994.
2. At the outset Shri Pulak Kr.Saha, Ld.Chartered Accountant appearing for the applicant had submitted that the applicant are engaged in providing, inter alia, commercial and industrial construction services, construction of residential complexes, works contract etc.. The Ld.Chartered Accountant has submitted that the confirmed demand of Rs.3.14 Crores for the period 2006-07 & 2007-08 comprises of three parts; the first part involving an amount of Rs.2.97 Crore relate to denial of the benefit of Notification No.1/2006-ST dated 01.03.2006 on the ground that the services rendered by the applicant were in the nature of only completion and finishing services, hence, they fall out of the ambit of said exemption Notification, the second part involving an amount of Rs.15.61 Lakhs, relates to denial of benefit of concessional rate of duty of 2%/4% under the Works Contract (Composition Of Scheme For Payment Of Service Tax) Rules, 2007 and the third part relates to recovery of Service Tax on the amount of taxable value received after enhancement of the rate of tax from 10% to 12% which is around Rs.63,000/-, where the services were rendered and invoices were raised prior to enhancement of the rate of duty. The Ld.Chartered Accountant, mainly concentrated his argument on the denial of exemption Notification No.1/2006-ST dated 01.03.2006. It is the submission of the Ld.Chartered Accountant that they have entered into different contracts with various parties for carrying out the job of fixation of glass faceds, glass windows etc. which have been clearly spelt out in the respective contracts. It is the submission that the said work commences and continues during the course of construction of the building itself and it is not a finishing work after completion of the building. The Ld.Chartered Accountant further submitted that the said glass work is a concept newly introduced in the industry by which the brick work in a building is replaced with the glass frames. Thus, it cannot be said that the said work relates only to finishing and completion work of a building. On the contrary, it should be treated a part of the construction of the building. In his alternative submission, the Ld.Chartered Accountant submitted that in the event their plea of treating the said construction work is unacceptable, then they are entitled to the benefit of Notification No.12/2003-ST dated 20-06.2003 as amended for deduction of the value of the materials supplied and used in the said work. The Ld.Chartered Accountant further submitted that the materials used in rendering the said service ought to be deducted from the total taxable value of the services as the said material has suffered VAT. The Ld.Chartered Accountant, however, fairly conceded that all the photographs relating to construction and other details now placed before this Tribunal, were not submitted before the adjudicating authority in support of their claim that the work carried out by them were not finishing work, but it is during the course of construction of the building, hence should not be treated as only finishing work. Regarding the rejection of the claim of allowing benefit under Notification No.12/2003-ST dated 20.06.2003 by the Commissioner in the impugned order, he has submitted that the table on which the Ld.Commissioner has relied in the first part at page 18 of the impugned order was a mistake on their part as the amount received against each contract has been shown in the first column against the total contract value, whereas, in the third column of the said table, the total material supplied has been reflected in the respective years. However, the correct value of materials supplied to the said project has now been arrived at by them which are duly certified by the Chartered Accountant reflecting.
3. The Ld.A.R. for the Revenue has submitted that all these submissions now being advanced by the applicants were not submitted before the Ld.Commissioner. Also he has submitted that the photographs which had been enclosed by the Ld.Chartered Accountant at page 68-70 of the Appeal Paper Book, were not before the Ld.Commissioner. Also, they have not produced all the contracts against which they rendered services to their various clients. He submits that in absence of these documents, it could not be possible to arrive at the correct conclusion by the adjudicating authority that the applicant are eligible to the benefit of Notification No.1/2006-ST dated 01.03.2006. Also, on their alternate plea that they are entitled to the benefit of Notification No.12/2003-ST dated 20.06.2003, he has submitted that the adjudicating authority had arrived at a finding on the basis of the data submitted by the applicants. The applicants plea now that the data submitted were earlier incorrect has no credibility. However, he fairly concedes that all these issues need to be examined afresh by the adjudicating authority.
4. After hearing both sides for some time we are of the opinion that the appeal itself could be disposed of at this stage. Hence, after waiving the requirement of pre-deposit of dues adjudged, we take up the appeal itself for disposal with the consent of both sides.
5. We find that undisputedly the appellant had rendered services under the category of commercial or industrial construction services during the relevant period. The dispute mainly rests on the admissibility of benefit of exemption Notification No.1/2006-ST dated 01.03.2006. It is the Revenues case that by fixing the glass to the buildings, the appellant had undertaken the job of completion and finishing work to the building; whereas, the appellants claim has been that since the said work were carried out during the course of construction of the building itself, hence, it cannot be treated as only a finishing work, rather it is a part of the construction work and therefore they are eligible to the benefit of Notification No.1/2006-ST dated 01.03.2006. Also, they have advanced an alternate plea that in the event it is held that they are not entitled to the benefit of Notification No.1/2006-ST dated 01.03.2006, then in any case, they would be entitled to the benefit of Notification No.12/2003-ST dated 20.06.2003 for deduction of the value of material from the gross contract value. With regard to the first issue, the appellant has placed certain evidences before us by way of photographs of construction of the buildings and correspondences between them and their clients which were admittedly not placed before the adjudicating authority. Further, we find that in respect of the alternate claim of availability of the benefit of Notification No.12/2003-ST dated 20.06.2003, the Ld.Chartered Accountant for the applicant has accepted that the data submitted earlier before the adjudicating authority were incomplete & incorrect which resulted into denial of the benefit of the said benefit . But, on the basis of Chartered Accountants Certificate now produced, the value of materials ought be deducted from the total contract value under Notification 12/2003 ST dt.20.06.2003, even if the benefit of the Notification No.1/2006-ST dated 01.03.2006 is denied to them. We find force in the argument of the Ld.Chartered Accountant and also there is no serious objection from the department to remand the case to the adjudicating authority for re-consideration of the said issue along with all other issues. In these circumstances, in the interest of justice, we feel it appropriate to remand the matter to the Ld.Commissioner to decide these issues afresh after considering all the evidences on record and that would be produced by the appellant in support of their claim advanced as above. Since we are remanding the major portion of the demand, we do not feel it appropriate to decide the other two issues which should also be decided along with the main issue. All issues are kept open. In the result, the impugned order is set aside and the appeal is allowed by way of remand.
(Pronounced and dictated in the open court.) SD/ SD/ (I.P.LAL) (D.M.MISRA) MEMBER(TECHNICAL) MEMBER(JUDICIAL) sm 6 Appeal No.S.T. 322/11