2015 (11) TMI 1040

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....Varun Gaba, Adv ORDER Per R K Singh Revenue filed this appeal against order-in appeal dated 27.9.2012 in terms of which the appellant was granted the benefit of 67% abatement under Notification No. 15/2004-ST, 1/2006-ST and also extended the benefit of Section 80 for setting aside penalties. Vide order-in-original dated 18.11.2011 demand of Rs. 5,64,530/- along with interest was confirmed again....

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.... 3. The respondent on the other hand, pleaded that the abatement of 67% is available even if there was free supply material in the light of the CESTAT decision in the case of M/s Bhayana Builders Pvt. Ltd. Vs. CCE - 2013 (32) STR 49 (Tri.-LB) and that it was indeed under a bona fide belief that the work done for local Govt. body (Municipal Corporation) was not covered under commercial or industri....

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....received by the appellant would have included the cost of material used in connection with construction of commercial shops for Municipal Corporation, Bilaspur. As regards extending the benefit of Section 80 of the Finance Act for setting aside the penalties we find that after allowing the 67% abatement the impugned demand would reduce to about one third of the amount confirmed by the primary adju....

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....They were under bonafide belief that being government contract work and the shops were allotted to the unemployed people and it was a state sponsored scheme. Hence, they are not liable to pay the service tax. (iv) Thus appellant not only has shown bonafide belief, but also explained the causes which constitute "reasonable cause" for not discharging service tax timely. In support of my conclusion....