Custom, Excise & Service Tax Tribunal
Rajshekhar Construction Company Pvt ... vs Guwahati on 11 February, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 75179 of 2014
(Arising out of Order-in-Original No. 04-05/Commr./ST/GHY/2013-14 dated
04.10.2013 passed by the Commissioner of Commissioner of Central Excise, &
Service Tax 5th Floor, Sethi Trust Building G. S. Road Bhangagarh Guwahati-781005)
M/s. Rajshekhar Construction Company Pvt. Ltd. : Appellant
Bloack-7(a), Neha Apartment
S.J.Road, Athgaon, Guwahati-781001
VERSUS
Commissioner of Central Excise & Service Tax, : Respondent
Service Commissionerate,
Sethi Trust Building, G.S. Road, Bhangagarh
Guwahati-781005
APPEARANCE:
Shri Raginee Goyal, C.A. for the Appellant
Shri R. K. Agarwal, Authorized Representative for the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO.75536/2025
DATE OF HEARING: 11.02.2025
DATE OF PRONOUNCEMENT: 04.03.2025
ORDER:[PER SHRI K. ANPAZHAKAN] The present appeal has been filed against the impugned Order-in-Original No. 04- 05/Commr./ST/GHY/2013-14 dated 04.10.2013 passed by the Commissioner of Commissioner of Central Excise, & Service Tax 5th Floor, Sethi Trust Building G. S. Road Bhangagarh Guwahati-781005.
2. Briefly stated facts of the case are that M/s. Rajashekhar Construction Company ( herein after referred as the appellant) is engaged in Page 2 of 8 Appeal Nos.: ST/75179/2014-DB infrastructure constructions such as Road, Bridges, Irrigation Works etc. The appellant is registered as a service provider under the category of 'Works Contract Service', Supply of Tangible Goods Service', 'Renting of Immovable Property Service' and 'Transportation of Goods by Road Services'. 2.1. An enquiry was initiated against the appellant by the Officers of DGCEI and on completion of the investigation a SCN dated 18.10.2012 was issued to the appellant demanding service tax of Rs.1,01,05,797/- (including cesses) for the period 01.04.2007 to 31.03.2012. Another SCN dated 18.10.2012 was issued by the Commissioner of Central Excise, Guwahati demanding service tax of Rs.2,41,61,720/-( including cesses) for the period 01.06.2007 to 30.09.2011.
2.2. On adjudication, the Ld. Commissioner has disposed of both the Notices together vide impugned Order-in-Original No. 04-05/Commr./ST/GHY/2013- 14 dated 04.10.2013, wherein he has confirmed the demands of Rs. 85,01,826/- under Works Contracts Services and Rs. 9,47,396/- under the category of Renting of immovable property Services, totally amounting to Rs. 94,49,222/-. The Ld. Commissioner has appropriated the amount of Rs. 26,85,439/- and Rs. 9,47,396/- totally amounting to Rs. 36,32,835/-, paid by the appellant. A penalty of Rs.58,16,387/- was imposed under section 78 of the Finance Act, 1994 and Rs.10,000/- was imposed under section 77 of the Finance Act, 1994.
3. The appellant submits that one of the projects involved in the demand was on contractual receipts for 'Rehabilitation of Vendors at Dergaon, Assam wherein total disputed demand of Service tax upto conclusion of the project was Rs. 85,01,826/-.
Page 3 of 8Appeal Nos.: ST/75179/2014-DB Payments to the tune of Rs. 28,60, 782/- have been admitted and paid in this regard after the date of filing of this appeal. Out of that, Rs. 20,92,696/- is subject matter of this appeal, i.e. pertaining to the FY 2011-12, and balance paid (out of Rs. 28,60,782/-) pertains to FY 2012-13, not part of impugned order and appeal before this Tribunal. Out of Rs. 20,96,696/- disputed demand for Dergaon Market project, the appellant paid Rs. 17,48,439/- which need to be appropriated as is admitted and paid by the appellant for Market complex at Dergaon in sub contract with Assam Valley Construction Company. Balance payable is Rs. 3,44,257/- which is not disputed by the appellant. Thus, the appellant submits that the total amount paid against the present case in appeal is Rs. 36,32,835/- + Rs. 17,48,439/- = Rs. 53,81,274/- and The demand pending in appeal which stands unpaid and is in dispute is Rs. 31,20,552/-(i.e. Rs. 85,01,826/- less Rs. 53,81,274/-).
3.1. The summary of the said tax demand in dispute is against the following contracts:
Sl.
No. Party Work done Category Amt. Recd ST (inc.
Cesses)
1. ASAMB Cold Storage CICS 676,667 24,564
2. NBCC Ltd. Installation ECIS 8,844,811 321,077 testing, lighting of IT Building
3. PWD Accoustic ECIS 1,004,150 36,452 (Electrical Enclosure to Circle) Genset, Halide lights of Comm of Sales Tax
4. PWD Power Cable, New ECIS 3,009,599 109,252 (Building) Secretariat Complex
5. AIDCL Ginger pack WCS 83,421,049 3,232,346 house With cold storage
6. NBCC Ltd Rehabilitation of WCS 52,886,296 2,092,696 Page 4 of 8 Appeal Nos.: ST/75179/2014-DB vendors Total 14,98,42,572 58,16,387 3.2. Regarding the demand of service tax confirmed at Sl. Nos. (i), (ii), (iii) and (iv) in the table above, the appellant submits that the service rendered by them includes materials and hence the appropriate classification of the service would be 'Works Contract Service'. But, in the impugned order the demands have been confirmed under the category of 'Commercial or Industrial Construction Service' and ' Erection, Commissioning and Installation Service'. Since no demand has been made under 'Works Contract Service', the demands of service tax confirmed under CICS and ECIS is not sustainable. Further, the appellant submits that the demands raised pertained to the period 2007-08 and the SCN was issued on 18.10.2012, which is beyond the normal period of limitation. The appellant submits that they have been filing returns regularly and the demands have been raised based on the information available in their books of account. Thus, the appellant submits that they have not suppressed any information from the department and hence the demand raised by invoking extended period of limitation is not sustainable. As the entire demand in respect of the demands confirmed at Sl. Nos. (i), (ii),
(iii) and (iv) in the table above, pertains to the period beyond the normal period of limitation, the demand confirmed in the impugned order on these counts is not sustainable on the ground of limitation also.
3.3. Regarding the AEZ Ginger Park House with Cold Storage at EPIP, Amingaon, the appellant submits that the construction of the said pack house Page 5 of 8 Appeal Nos.: ST/75179/2014-DB with cold storage was approved under Agri Economic Zone (AEZ) for 'Fresh and Processed Ginger' in Assam. The Government of India had announced the creation of AEZ in EXIM Policy 2001-02 with the objective of promoting greater exports of fresh and processed agricultural produce from the country. Since, the construction of cold storage and pack house constructed was meant for furtherance of activities related to agriculture and not for commercial or industrial purpose, the 'work Contract' service rendered by them are not liable for service tax as per the definition of 'work contract service' existed during the relevant period. 3.4. Regarding the demand of service tax of Rs.20,96,696/- confirmed in the impugned order with respect to construction of Dergaon Market project, the appellant has already paid Rs. 17,48,439/- which need to be appropriated as is admitted and paid by the appellant for Market complex at Dergaon in sub contract with Assam Valley Construction Company. Balance payable is Rs. 3,44,257/- which is not disputed by the appellant.
4. The Ld. A.R. reiterated the findings in the impugned order.
5. Heard both sides and perused the appeal documents.
6. We observe that the following demands have been confirmed in the impugned order
(i) Cold Storage for Assam State Agricultural Marketing Board - 24,564/-.confirmed under CICS
(ii) Works Contract Services at Income Tax Building for various types of Electrical works - Rs. 3,21,077/-. confirmed under ECIS
(iii) Works Contract Services for Accoustic Enclosure to Genset and Lighting works at Commissioner of Sales Tax Building, Assam - Rs. 36,452/- confirmed under ECIS Page 6 of 8 Appeal Nos.: ST/75179/2014-DB
(iv) Works Contract Services for Power Cabling works at New Secretariat Building of Assam -1,09,252/-. confirmed under ECIS 6.1. Regarding the demand of service tax confirmed at Sl. Nos. (i), (ii), (iii) and (iv) in the table above, we observe that the service rendered by them includes materials and hence the appropriate classification of the service would be 'Works Contract Service'. But, in the impugned order the demands have been confirmed under the category of 'Commercial or Industrial Construction Service' and ' Erection, Commissioning and Installation Service'. Since no demand has been made under 'Works Contract Service', the demands of service tax confirmed under CICS and ECIS is not sustainable. 6.2. Further, we observe that the demands have been raised for the period 2007-08 and the SCN was issued on 18.10.2012, which is beyond the normal period of limitation. We observe that the appellant have been filing returns regularly and the demands have been raised based on the information available in their books of account. Thus, we find that the appellant have not suppressed any information from the department and hence, we hold that the demand raised by invoking extended period of limitation is not sustainable. As the entire demand in respect of the demands confirmed at Sl. Nos. (i), (ii), (iii) and
(iv) in the table above, pertains to the period beyond the normal period of limitation, we hold that the demand confirmed in the impugned order on these counts is not sustainable, on the ground of limitation also.
6.3. Regarding the AEZ Ginger Park House with Cold Storage at EPIP, Amingaon, we observe that the construction of the said pack house with cold storage Page 7 of 8 Appeal Nos.: ST/75179/2014-DB was approved under Agri Economic Zone (AEZ) for 'Fresh and Processed Ginger' in Assam. The Government of India had announced the creation of AEZ in EXIM Policy 2001-02 with the objective of promoting greater exports of fresh and processed agricultural produce from the country. Since, the construction of cold storage and pack house constructed for furtherance of activities related to agriculture and not for commercial or industrial purpose, we hold this work cannot be made liable for service tax, as per the definition of 'works contract service' existed during the relevant period. 6.4. Regarding the demand of service tax of Rs.20,96,696/- confirmed in the impugned order with respect to construction of Dergaon Market project, we find that the appellant has already paid Rs. 17,48,439/- which need to be appropriated as is admitted and paid by the appellant for Market complex at Dergaon in sub contract with Assam Valley Construction Company. Balance payable is Rs. 3,44,257/- which is not disputed by the appellant. 6.5. We observe that the appellant have been filing returns regularly and the demands have been raised based on the information available in their books of account. Thus, we find that the appellant have not suppressed any information from the department and hence the demand raised by invoking extended period of limitation is not sustainable. For the same reason no penalty imposable on the appellant in respect of the demands confirmed and admitted by the appellant.
7. In view of the above discussions, we pass the following order:
Page 8 of 8Appeal Nos.: ST/75179/2014-DB
(i) The demands confirmed at Sl. Nos. (i), (ii), (iii) and (iv) in the table at para 3.1 supra, is set aside on merit as well as on limitation.
(ii) Regarding the demand of service tax of Rs.
32,32,346 confirmed w.r.t. construction of AEZ Ginger Park House with Cold Storage at EPIP, Amingaon, the demand is set aside as the same is not meant for commercial purpose.
(iii) The demand of service tax of Rs.20,96,696/- confirmed in the impugned order with respect to construction of Dergaon Market project, is upheld. However, the appellant has already paid Rs. 17,48,439/- which is appropriated. Balance Rs. 3,44,257/- is payable by the appellant along with interest, which is not disputed by the appellant.
(iv) No penalty imposable on the appellant.
(v) The appeal filed by the appellant is disposed on the above terms.
(Order Pronounced in Open court on 04.03.2025) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) RKP