Custom, Excise & Service Tax Tribunal
Gurbaksh Singh Builders Pvt. Ltd vs Commissioner Of Service Tax on 12 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Service Tax Appeal No. 37 of 2010
[Arising out of Order-In-Original No. 27/JM/2009 dated 1.10.2009 passed by Commissioner of Service Tax (Adjn), New Delhi]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Mr. V Padmanabhan, Member (Technical)
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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 the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
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Whether Order is to be circulated to the Departmental authorities?
Yes
Gurbaksh Singh Builders Pvt. Ltd. Appellant
Vs.
Commissioner of Service Tax Respondent Delhi
Appearance:
Shri Jitender Singh, Advocate for the Appellants Ms. Suchitra Sharma, AR for the Respondent CORAM:
Hon'ble Ms Archana Wadhwa, Member (Judicial) Hon'ble Mr. V Padmanabhan, Member (Technical) Date of Hearing/ Decision: 12.08.2016 FINAL ORDER NO . 53151 /2016 Per Archana Wadhwa (for the Bench):
After hearing both sides duly represented by Shri Jitender Singh, learned Advocate appearing for the appellant and Ms Suchitra Sharma, learned DR appearing for the Revenue, we find that the appellants are engaged in providing commercial or industrial construction services. They were duly registered with the department for payment of service tax and were filing ST 3 return for the period 2004 onwards and were discharging service tax liability accordingly.
2. The demand in the present case pertains to two different periods. It is seen that during the period 2005-2006, the appellants claimed the benefit of notification No. 15/2004, which allowed abatement to the extent of 67% of the value of the goods (from 2005 -2007). The said denial was on the ground that the appellants have received material from the service recipient, free of cost, and as such, benefit of abatement cannot be extended to them. On this ground, we find that the issue stand covered by the Larger Bench of the Tribunal in the case of Bhayana Builders Pvt. Ltd. vs. CST, Delhi [2013 (32) STR 49 (Tri-LB), which stand followed in various subsequent decisions of the Tribunal. One such reference can be made to the Tribunals decision in the case of Ahclon Builders & Developments Pvt. Ltd. vs. CCE & ST, Surat I [2016 (32) STR 245 (Tri-Del)].
We find that the issue on the said point is no longer res integra. As such, the Revenues stand and the said confirmation of demand on the said count cannot be upheld.
3. The second limb of the demand pertains to the period 2007-2008. It is undisputed fact on record, admitted by the appellant himself that during the said period, no service tax returns were filed and no service tax was paid. The same was pointed out by the Revenue vide their letter dated 25.4.08 and it is only thereafter the appellant deposited the service tax along with interest.
As per the appellant, the said service tax was not deposited as their customer had not given the tax amount and they were under the bonafide impression that if tax payment has not been paid by the customers, same need not be deposited. As soon as the Revenue pointed out that, they deposited the tax along with interest on 16.9.2008. In such a scenario, imposition of penalties on them is not called for and same should be set aside.
4. Countering the above plea of the learned advocate, Ms. Suchitra Sharma, learned AR appearing for the Revenue, submits that the appellant was registered service tax payee and were duly filing the return for the previous two financial years. As such, it can be safely concluded that the appellant was aware of his liability to pay service tax. During the subsequent financial year 2007 -2008 also non-filing of return and non payment of service tax reflects upon the malafide of the appellant, thus calling for imposition of penalties. Accordingly, she prays for upholding the impugned order.
5. After carefully considering the submissions made by both the sides, we find that the appellants are only challenging the imposition of penalty upon them and there is no challenge to the effect that Service Tax was required to be paid in respect of services undertaken by them during the period 2007-2008. The fact that service tax was not deposited because the same was not received by the appellant from their client, cannot be adopted as a reasonable bonafide ground for invoking the provisions of section 80 of the Finance Act, 1944 as prayed for by the learned advocate. Admittedly, the appellant was registered with the Service Tax department and was duly discharging its service tax for the previous financial years and as such, was aware of the his legal obligation to discharge the service tax in respect of construction activities undertaken by him. Non-receipt of amount of service tax from his client cannot be adopted as a excuse for non-payment of service tax to the exchequer when the liability lies heavily on the appellant himself. As such, we find no justifiable reason for invoking provisions of section 80 so as to set aside the penalty.
However, we take note of the appellants submission that amount of around Rs.45 lakh deposited by them for the year 2007-2008 is without availing the benefit of abatement in terms of Notification No. 15/2004. As we have already observed that the benefit of said notification would be available to the assessee even if it has received free supply items from his clients, we are of the view that appellants duty liability is required to be requantified in terms of law declared by the Larger Bench in the case of Bhayana Builders (P) Ltd. For the said purpose, i.e. for re-quantification of their duty liability, we remand the matter to the original adjudicating authority. The quantum of penalty required to be imposed upon them would also be quantified based upon requantification of service tax. Apart from that, demand for the previous year having been held by us as not sustainable, the same is set aside along with setting aside of penalty on that account. The quantification accordingly would be done by the adjudicating authority.
6. The appeal is allowed in the above terms.
(dictated and pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
( V. Padmanabhan )
Member(Technical)
ss
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