TaxTMI 
TaxTMI 
2010 (12) TMI 145
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....sp; The appellants construct and commission the cross country high tension power transmission line using material normally of own supplied or of owners supplied such as galvanized plates, angels, nuts, bolts, washers for setting up of towers, accessories like danger plates, anti-climbing devices, hangers, insulators, conductors, earth wire etc.. Some components and materials are bought from the market and some are manufactured by the appellants. 3. A new taxable category of service namely Construction Services effective 10.09.2004 was introduced by the Finance Act, 2004. Further, CBEC vide Circular No.80/10/2004-ST dated 17.09.2004 clarifi....
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....red to in the definition of construction service. 5. The appellants vide their letter dated 18.02.2005 once again explained their activities in detail. Referring to the circular dated 17.09.2004, the appellants stated that their activity would appropriately fall under construction services. The appellants further stated that as the service tax being a new levy, it was not clear to their industry also whether to classify it as construction activity or the same is covered or not under the levy of service tax, the activity being infrastructure project carried out for Government undertakings only. The appellants also informed that confusion prevailed at the end of departme....
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....st as applicable. Further penalty of Rs.1,20,00,000/- has been imposed under Section 78 and a penalty of Rs.29,200/- has been imposed under Section 76 of the Finance Act, 1994. The learned advocate appearing on behalf of the appellants submitted that in the miscellaneous application filed by them, appellant had sought to raise an additional ground that the activity undertaken by them is nothing but a works contract and therefore the service would be liable to service tax only w.e.f. 01.06.07. However in view of the fact that appellant has already paid service tax with interest in full, he submitted that he is not pressing the miscellaneous application. Accordingly the miscellaneous application filed by the appellant ....
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....penalty can be imposed under Section 78 in the absence of specific finding with reference to suppression of facts of misdeclaration. Learned DR reiterates the reasoning adopted in the adjudication order. 9. We have considered the submissions made by both the sides. We find considerable force in the argument advanced by the learned advocate that during the relevant period leading to the show cause notice, there was confusion and appellant had already written a detailed letter after an enquiry by the department explaining the activity undertaken by them. Further as soon as the officers visited their factory in February 2005, appellant promptly paid the service tax with i....
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....eover, the department has made considerable efforts through publicity in the media, through meetings and open house with the trade etc. to spread the message of service tax liability. To plead ignorance in the face of these factors is not acceptable. 10. The very fact that in the month of August 2007, the Board issued a circular clarifying that erection of transmission power would be permissible from 10.09.04 and the fact that show cause notice had been issued in 2003 based on audit objection raised by CERA also lead to the conclusion that there was confusion not only in the minds of service tax payers but also in the department and the audit. The learned advocate fairly agreed that he is not....