2017 (5) TMI 288

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....y under the category of 'Erection, Commissioning and Installation Service' for the period prior to 01/06/2007 i.e. 01/03/2005 to 31/10/2006. The adjudicating authority has held that the services rendered by the appellant is covered under 'Erection, Commissioning and Installation Service' and rejected the contention of the appellant that the services are 'Works Contract Service' provided to their clients. While doing so, the adjudicating authority relied upon the provisions of Section 65(105)(zzd) as amended from time-to-time. On coming to such a conclusion he confirmed the demand raised along with interest and appropriated amount of service tax paid as also the interest, and imposed penalties under Section 76 and 78 of the Finance Act, 1994....

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....ing paid the tax and interest prior to the issuance of the show cause notice, as there being ambiguity on the discharge of service tax on 'Works Contract Service', whether the adjudicating authority was correct in imposing penalties on the appellant under Section 76 and 78 of the Finance Act, 1994 and whether the provisions of Section 73(3) of the Finance Act, 1994 would be applicable or otherwise. 6. Learned Counsel takes us through the provisions of Section 73(3) as also the judgment of the apex Court in the case of Larsen & Toubro Ltd and the judgment of the Punjab & Haryana High Court in the case of Ajay Kumar Gupta (supra). He submit that there is no dispute as to the facts that the contracts executed by the appellant are 'Works Con....

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....pplicable when the offences are committed in the case of same transactions. It is his submission that in the case in hand, the appellant had entered into contracts inclusive of service tax amount, collected the same, bud did not deposit the same with the Government of India. It is his submission that the appellants were very much aware of the fact that their contracts are inclusive of service tax. Hence, it is his submission, there was intent to deprive the Government the legitimate tax liability; there is no reason to show any leniency to this appellant and the penalties imposed be affirmed. 8. On consideration of the submission made by both sides and on perusal of the records, we find that the issue that boils down in this case is whet....

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....s 'works contract' prior to or post 01/06/2007. In the facts of the case in hand, we find that the claim of the appellant that the execution of the various projects by them under works contract is not negated by the lower authority on factual matrix. Since the tax under 'erection, commissioning and installation' charges are not payable by the appellant for the period prior to 01/06/2007 as the contract executed by them being 'works contract', the question of imposing penalty under Section 76 and 78 of the Finance Act, 1994 does not arise. The law has been settled by the Hon'ble Punjab & Haryana High Court in the case of Ajay Kumar Gupta (supra), wherein their Lordships held that once an assessee was not liable to pay tax under the provision....