Custom, Excise & Service Tax Tribunal
Indus Engineering & Construction Co vs Commissioner Of Central Excise, Nagpur on 8 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/87612/2013-Mum (Arising out of Order-in-Appeal No. PVR/198/NGP/2013 dated 21.3.2013 passed by the Commissioner of Central Excise (Appeals), Nagpur ) For approval and signature: Honble Mr. Anil Choudhary, 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?
2. Whether it should be released under Rule 27 of the :
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?
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Indus Engineering & Construction Co.
:
Appellant
VS
Commissioner of Central Excise, Nagpur
:
Respondent
Appearance
Shri Hemant A. Rajandekar, C.A. for Appellant
Shri S.V. Nair, Assistant Commissioner (A.R) for respondent
CORAM:
Mr. Anil Choudhary, Member (Judicial)
Date of hearing : 8/12/2014
Date of decision : 8/12/2014
ORDER NO.
Per : Anil Choudhary
The present appeal is against the Order-in-Appeal No. PVR/198/NGP/2013, dated 21.3.2013 passed by the Commissioner (Appeals).
2. The appellant is a contractor providing construction works for Military Engineering Services, Ministry of Finance, Government of India. Appellant done constructed Residential quarter, flooring for shell forge shop at Oridnance Factory, Chandrapur among others. The Revenue issued show cause notice dt. 30.12.2010, alleging that the appellant is liable to service tax under the category of construction of residential complex service as they have constructed mess for the Army, wherein, the contract was awarded by Military Engineering Service, Government of India. The appellant contested the show cause notice issued for the demand for residential quarters. The appellant offered to pay tax in respect of the flooring work in the Ordinance factories under the Commercial or Industrial Construction service and accordingly, they paid the tax of Rs.1,70,131/- and also the interest of Rs.36,146/-. Vide Order-in-Original dt. 20.6.2012 the proposed demand of Rs.9,85,883/- was confirmed including Rs.1,70,131/- on account of service under Commercial or Industrial Construction Head, for repairs of shop floor or Ordinance factory. Further alongwith interest, penalty was also imposed under Section 76, 77 & 78 of the Act. Being aggrieved, the appellant had preferred appeal before the Commissioner (Appeals), who relying on the CBEC Circular No. 332/16/2010-TRU dt. 24.5.2010, wherein, this clarified that in case of construction like construction of new residential complex etc. for use of the government or its officers. It was held that the same is not liable to tax. The appellant further states that construction of quarters for Military/Army, Government of India, Ministry of Defense, are not taxable as per the TRU Circular. Further, in Order-in-Original, tax of Rs.1,70,131/- under the category of commercial and industrial construction service for construction of shop flooring of the Ordinance factory is wrongly confirmed. The Commissioner (Appeals) have dropped the demand in respect to the category of construction of residential complex for Military/Army quarters. Further, the Ld. Commissioner observed that proper investigation was not conducted in the case leading to issuance of show cause notice by the department for shop floor work under Residential Complex Construction Service. Therefore, the Jt. Commissioner in the order-in-original have gone beyond the scope of show cause notice and confirmed the demand under the category of commercial and industrial construction service which was not proposed in the show cause notice. Since, the appellant have paid the tax and not contested the demand, the same was confirmed by the Commissioner (Appeals) along with interest and further penalties were confirmed, but reduced under Section 78, to the amount of tax i.e Rs.1,70,131/-. Being aggrieved, the appellant is in appeal before this Tribunal.
3. The Ld. Counsel for the appellant urged that under the facts and circumstances, the tax was paid by the appellant under the commercial or industrial construction service for repairs of shop floor in the Ordinance factory, which is directly under the control of Government of India, does not qualify as taxable service and as such the Ld. Commissioner (Appeals) erred in confirming the demand along with penalty in spite of observing that the same is not exigible to tax. Accordingly, the appellant vehemently, prays for setting aside the order-in-appeal and order-in-original to that extent and for refund of the amounts already deposited with interest as per law.
4. The Ld. A.R. relies on the impugned order.
5. Having considered the rival contentions, I find that the repair work of shop floor in the Ordinance factory owned and control by the Government of India, Ministry of Defense, does not qualify under the category of commerce or industrial construction service and accordingly, I hold that no tax is payable by the appellant under the category of commercial or industrial construction service. The demand confirmed vide the impugned order is set aside and all the penalties are deleted. Accordingly, the appeal is allowed. The appellant will be entitled to the refund of tax and interest already paid with interest as per Rules. I further direct the revenue authority to refund the amount of tax and interest deposited by the appellant within a period of 45 days from the receipt of a copy of this order.
(Pronounced & Dictated in court) (Anil Choudhary) Member (Judicial) Sm ??
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