Custom, Excise & Service Tax Tribunal
Glaztech Alupenal Pvt. Ltd vs C.C.C.E. & S.Tax, Jaipur on 9 December, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 9.12.2013 Misc. Application No.61042 of 2013 with Stay application No.58132 of 2013 and Service Tax Appeal No.57571 of 2013 Arising out of the order in appeal No.24(VC)ST/JPR-I/2012 dated 16.4.2013 passed by the Commissioner (Appeals), Customs, Central Excise, Jaipur. For Approval and Signature: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Glaztech Alupenal Pvt. Ltd. .. Appellants Vs. C.C.C.E. & S.Tax, Jaipur . Respondent
Appearance:
Present Shri Puneet Aggarwal, for the appellant Present Shri Govind Dixit, A.R. for respondent Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Technical Member Final Order No. 58519/2013 Per Justice G. Raghuram:
Heard the ld. Counsel for the appellant and the ld. A.R. for the respondent/Revenue. At the stage of considering the stay application, we dispose of this substantive appeal itself after waiving the pre-deposit.
2. The petitioner is a registrant under Transport of goods by road service and Business Auxiliary Service (BAS). Revenue assumed that during 2007-08 and 2008-09 the ACP cladding and coil cutting services provided by the petitioner amounted to BAS. A show cause dated 18.11.2010 was issued alleging that during the course of Audit of the appellant records, it was seen that the appellant had provided ACP cladding and coil cutting for which charges were received; that these services are taxable under BAS defined in Section 65(19) read with Section 65 (105)(zzb) of the Finance Act, 1994 (the Act); that the appellant received Rs. 15,677,094/- for providing these services and consequently service tax of Rs.1,93,693/- besides interest and penalties thereon must be remitted.
3. In response, the appellant submitted inter alia that the service of providing ACP cladding essentially falls within commercial or industrial construction service, in particular under clause (c ) of Section 65(25b) of the Act as completion and finishing services in respect of civil construction or part thereof; and that since commercial or industrial service provided in respect of roads is excluded from the definition of commercial or industrial construction service; the activity is not taxable. In elaboration of this contention, the appellant contended that services provided for toll gates (for which the ACP cladding was provided) was in fact a service provided in respect of roads, the service provided by the appellant, though generically falling under commercial or industrial construction service provided by the appellant is however excluded by the specific exclusionary clause in Section 65(95b) of the Act.
4. The Deputy Commissioner of Central Excise, Jaipur I vide adjudication order dated 30.12.2011 confirmed service tax of Rs.1,93,693/- and appropriated Rs.30,772/- (already remitted) by the appellant towards service tax payable for the admitted BAS provided in respect of coil cutting. The balance amount of Rs.1,62,921/- was therefore liable to be remitted along with interest and penalties under Sections 76 and 77 of the Act, confirmed by the adjudication order.
5. The appellant unsuccessfully preferred an appeal which was rejected by the order of the Commissioner (Appeals) dated 16.4.2013. The appellate authority concluded that the petitioner had provided BAS; that services provided in relation to road works under BAS are not excluded from the liability to tax and therefore the adjudication order suffers from no error, warranting interference.
6. We notice from the show cause notice dated 18.11.2010 that apart from the over broad attribution that the appellant had provided a service in respect of ACP cladding which amounts to job work, falling within the definition Business Auxiliary Service in Section 65(19) of the Act, there is no specific assertion, either in the show cause notice or in adjudication order as to exact nature of the service provided by the appellant towards ACP cladding. According to the ld. Counsel for the appellant as part of ACP cladding, at the initial stage an iron skeleton is affixed on the civil construction already in place to provide a framework for affixing Aluminium Composite Panels (ACP); the panels are thereafter pasted on to the iron framework by adhesives. Thus, according to the ld. Counsel for the appellant, no processing or production of goods for the recipient of the service was provided by the appellant in APC cladding; and the activity is thus outside the purview of BAS. We have recorded this submission of the ld. Counsel addressed before us. We however find no mention of the exact nature or details of the activity which were considered by Revenue to constitute ACP cladding, either in the show cause notice, in the adjudication order or in the appellate order either. Be that as it may.
7. Since the appellant had specifically asserted that the service provided by it in respect of ACP cladding falls generically within commercial or industrial construction service; since this contention of the appellant was specifically extracted to in paragraph 8 of the adjudication order; and since the adjudicating authority failed to at all advert to this contention/defence of the appellant while recording its discussions and findings, we conclude that the adjudication order is unsustainable. Where a facially taxable service is classifiable under more than one taxable service and Revenue assumes that the service provided falls into one taxable service, (namely BAS in the present case), and the assessee asserts that the service falls generically within another taxable service (CICS), it becomes the non-derogable obligation of the adjudicating authority to deal with the dispute as to classification and he must record a finding that the service provided falls within a specified taxable service; and for reasons recorded for such conclusion. This is a fundamental obligation of the authority, having regard to the fact that there is facially an overlapping between several taxable services enumerated in Section 65 of the Act. This is the guidance mandated by Section 65A of the Act.
8. The order of the adjudicating authority dated 30.12.2011 clearly fails to deliver upon this obligation, of resolution of a dispute as to classification. Even the show cause notice dated 16.11.2010 does not specify the particulars of the service allegedly provided by the appellant, in relation to ACP cladding work executed in favour of the recipient and thus fails to provide adequate notice to the appellant.
9. For the aforesaid reasons, the adjudication order as confirmed by the Commissioner (Appeals), (impugned in this appeal) is unsustainable. The appeal is therefore allowed. The appellate order dated 16.4.2013 passed by the Commissioner (Appeals) is set aside. No costs.
(Justice G. Raghuram) President (Rakesh Kumar) Technical Member scd/ 1