TaxTMI 
TaxTMI 
2013 (11) TMI 403
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....at the activity undertaken by the appellant fell under the category of "Commercial or Industrial Construction Service" and they were liable to discharge service tax liability of Rs. 4,89,36,312/- on the consideration received for the services rendered. However, since the appellant did not obtain any service tax registration nor discharge any service tax liability, a show-cause notice dated 14/10/2010 was issued demanding service tax of Rs. 4,89,36,212/- on the activities undertaken by them during April 2005 to March 2010 along with interest thereon by classifying the service rendered as "commercial or Industrial Construction Service" and also proposing to impose penalties under the provisions of Finance Act, 1994. The appellant contested the levy on the following grounds: 2.1 The customers of the appellant floated tender work for interior works and most of the customers are banks. These customers appoint there own architect and planning consultants who prepare drawings, sketches, plans, etc. for the interior works to be undertaken by the appellant. Based on such planning, drawings, etc. the appellant undertook the work. The work executed inter alia includes supply and making built....
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....ure, pipeline or conduit, which is ............... Clauses (a) & (b) of the said Section does not have any application to the present case and the service tax demand has been confirmed under clauses (c) & (d). Clause (c) covers completion and finishing services and the said services are in the nature of completing and finishing the building which is under construction. In the present case the activities have been undertaken in an already constructed building and the said build is not new and therefore, close (c) of Section 65 (25b) is not attracted to the facts of the present case. Clause (d) of the said section provides for repairs, alterations, renovation, restoration or similar services in relation to a building of civil structure. The activity undertaken by the appellant does not come under repair activity and the activity undertaken by the appellant is in the nature of interior decoration work. Therefore, the appellant has not undertaken nay activity of renovation or restoration. It is further argued that Section 65 (25b) envisages that the activities listed or specified therein should be in relation to the building or civil structure. On a plain reading of the aforesaid prov....
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....al purposes like local government bodies getting shops constructed for letting them out, such activity would be commercial and builders would be subjected to service tax 13.3 In case of multi-purpose buildings such as residential cum commercial construction, tax would be leviable in case such immovable property is treated as a commercial property under the local/ municipal laws. 14.1 Construction of new buildings or civil structures used for commercial or industrial purposes and repair, alteration or restoration activities of such buildings and civil structures was already liable to service tax since 2004. In this year's budget, such construction service has been renamed as 'commercial and industrial construction service' under section 65(25b) of the Finance Act 1994 and renovation of a commercial or industrial building or civil structure has now been specifically included within the purview of service tax. 14.2 Post construction completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, especially if undertaken as an isolated or stan....
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....efore, cannot be extended the same treatment as that of machinery. In the light of the above, it is argued that the activity of renovation, repairs, etc. would attract service tax liability only if the same is undertaken with respect to the whole building and not with respect to the part of the building. 3.2 The Ld. Counsel for the appellant also argues that the demand is time barred inasmuch as the demand has been raised invoking the extended period of time. Earlier on similar activities undertaken by the appellant, the department had issued show-cause notices in 2002 demanding excise duty on the goods manufactured by the appellant and therefore, the activities of the appellants were known to the department. Therefore, extended period of time could not have been invoked in the instant case. 4. The Ld. Commissioner (AR) appearing for the Revenue made the following submissions: 4.1 Even if the activities undertaken by the appellant does not get specifically covered under repair, alteration, renovation or restoration, it would get covered under the expression "similar services" as specified in 65 (25b). Similarly even under clause (c) relating to completion and finishing services,....
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....argued that since the present case, the appellant has defaulted in payment of service tax by resorting to suppression, penalties are imposable both under Section 76 as well as under Section 78 during the period 16/06/2005 to 09/05/2008. However, for the period from 10/05/2008 onwards, the benefits of amended Section78 is applicable and penalties under both the sections are not warranted. Accordingly, he prays that the impugned order can be sustained. 5. We have carefully considered the submissions made by both the sides. Section 65 (25b) reads as follows: "Commercial or industrial construction" means - (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or  ....
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....tory provisions. Therefore, completion and finishing services, repair, alteration or renovation and restoration or similar services provided, whether in respect of a new building or an old building would attract service tax liability under Section 65 (25b) and we hold accordingly. 5.2 A more or less identical issue arose before this Tribunal in the case of Spandrel (cited supra) and this Tribunal held as follows:- "7. On perusal of the Orders-in-Original in two cases (M/s. Spandrel and M/s. Premier Agencies) and the Revision Order in one case (M/s. Delta Projects), we find that the lower authorities had recorded clearly the activities undertaken by the appellants. The summarize the activities undertaken by the appellants, it seems that the appellants are engaged in works such as false ceiling, partitions, flooring modular systems, painting, carpeting, electrical connections; works like wall paneling, false ceiling, interior furnishing, partitioning of Banks, Financial Institutions and other firms and supply & fixing of various furniture, etc. This portion of the findings of the lower authorities is not challenged by both sides. It is also undisputed that the appellan....
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....and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) repair, alternation, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is - (i) used, or to be used, primarily for; or (ii) occupied, or to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams." It can be seen from the above clause (c), services which have been rendered brought for the first time in the definition - "Commercial or Industrial Cons....
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....ifice enclosing a space within its walls would come within the scope of building and therefore even a particular floor or unit of a building which encloses a space within its walls and covered with roof would come within the scope of term "building". In Kalpakam Amma vs. Muthuram Iyer Muthurkrishna - AIR 1995 Ker 99, a question arose before the Hon'ble Kerala High Court whether the site on which a structure is built is a part of the building or not and the Hon'ble High Court held that if it forms an integral part of the structure and the same forms a composite unit, which is named "a building", the site naturally becomes a part of the building. A question arose before the Hon'ble Apex Court in the case of DG Gouse & Co. Vs. State of Kerala (AIR) 1980 SC 271 in the context of interpreting the Kerala Building Tax Act, 1975 and the Hon'ble apex court held that the word 'building' must receive its natural and ordinary meaning as "including the fabric or which it is composed, the ground upon which its walls stand and the ground embraced within those walls" and that is the correct meaning of the word 'building'. If we adopt the ratio of these decisions and apply the same to the fats of t....
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....he Bombay High Court did not have any occasion to examine whether part of the building also would be a building or not. Therefore, the ratio of these decisions would not have application to the facts of the present case. 5.6 The next issue for consideration is whether the demand is time barred or not? One of the grounds urged in the appeal is that the activities undertaken were known to the department and the department had issued show-cause notice for demand of excise duty earlier. However, on perusal of the record it is seen that the show cause notice issued to the appellant pertain to an earlier period, that is prior to 2004, when there was no service tax levy on "Commercial or Industrial Construction Service". The appellant was directed to furnish copies of the show-cause notices, if any, issued wherein there is an overlapping demand, that is, for both excise duty and service tax. The appellant was not able to produce any evidence showing that for the same period service tax as well as excise duty was demanded. In view of the above, the contention of the appellant that extended period of time could not have been invoked in the present case is not convincing. 5.7 It is an admi....
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....ached inasmuch as the appellant had not filed/furnished any returns during the impugned period. 5.9 As regards the plea of revenue neutrality claimed by the appellant, we do not find any merit in this argument. The principles of revenue neutrality, if at all, would apply only if the payment of tax and availment of credit is by the same entity as held by this Tribunal in the case of Jay Yuhshin Ltd. (cited supra). In the said case it was held that in the context of Cenvat scheme, it has to be shown that the revenue neutral situation would come about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods. Therefore, the principle of revenue neutrality does not apply to the facts of the present case. 5.10 A claim has also been made by the appellant that the appellant had supplied furniture which is chargeable to excise duty and not liable to service tax. The Hon'ble apex Court in the case of Craft Interiors Pvt. Ltd. Vs. CCE, Bangalore- 2006 (203) ELT 529 (SC) held that storage units, running counters, overhead unit, rear and side unit, wall unit, kitchen unit, conference tables and recep....
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....s, the show-cause notice was adjudicated vide order dated 25.2.2008 confirming excise duty payable by the appellant for the period 1997-98 along with penalty under Section 11AC for same set of activity. It is brought to notice that another show-cause notice has been issued on 4.7.2007 for levy of excise duty for the period 2005-06, which has been adjudicated vide order-in-Original dated 25.2.2008 confirming Central Excise duty of Rs. 9,00,011/- along with penalty and interest. It is noteworthy that levy of excise duty and/or Service Tax are mutually exclusive. 7.2 That, it is further observed that the Revenue had issued summons as back as on 27.2.2006 and initiated detailed enquiry for levy of Service Tax. In the course of enquiry and recording of the statement on 11.8.2010, the proprietor of the appellant Mr. Bhosle had denied the liability of Service Tax in respect of its activity, which is after going through the show-cause notice dated 23.3.2009 in the matter. 7.3 That, further it is observed that from TRU letter dated 27.7.2005, wherein it has been clarified that post construction, completion and finishing services are sought to be covered under clause (c) of the Section 65(....
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.... in the present case is one of interpretation of statutory provisions wherein the department has also tried to classify the same activity under 'Interior Decorator Services', which was turned down by this Tribunal. Thus, it can be said that the proprietor of the appellant firm bonafidely had the belief that he was not chargeable to tax under the provisions of Finance Act, 1994. Further, it is observed that the Revenue inspite of starting detailed inquiry since October, 2006, in the present proceedings, have issued show-cause notice after lapse of nearly three years on23.3.2009, which evidently reflects that the Revenue also took pretty long time in resolving the taxability of Service Tax as regards the activity of the appellant. 7.8 It is further noticed that the appellant has discharged VAT/Sales Tax on its activities and the activity in the nature of works contract have been brought to Service Tax w.e.f. 1.6.2007 particularly in case where the activity attracted payment of Sales Tax. 8. In view of aforementioned findings and observations, I hold that no case of fraud, collusion, willful mis-statement, suppressi9on of facts, contravention of any provisions of the Finance Act, 19....