TaxTMI 
TaxTMI 
2019 (12) TMI 526
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....able thereon, under Section 75, of the Act, ibid. 2.1 The Appellant has filed the Appeal before this Bench, on the ground that the services rendered by them during the period i.e. from Financial Year - 2010-11 to Financial Year -2012-13 (up-to June) were specifically excluded from the purview of taxable services and/or excluded from the scope of levy of Service Tax. The Original Authority vide Order-in-Original dated 27-04-2018 has unlawfully confirmed the demand of Tax proposed in the Show Cause Notice dated 19-04-2016 against the following remuneration received by them. (a) "Site formation, and clearance, excavation and earthmoving and demolition" in relation to agriculture (consideration involved Rs. 180,19,09,582/-) (b) Construction of Raw Water Reservoir, Ash Pond etc. (consideration involved Rs. 38,74,83,404/-) (c) Construction of Road (consideration involved Rs. 3,55,77,102/-) 2.2 The Appellant claims that the Services of "Site formation, and clearance, excavation and earthmoving and demolition", provided by them, were specifically in relation to the (a) Agriculture and (b) Construction activities relating to renovation and Maintenance of Water sources/bodies. Such acti....
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....le to pay Service tax of Rs. 22,98,33,478/- (including Cess). The SCN alleged that it was statutory obligation on the part of the Appellant to declare all their incomes in their ST-3 Returns even if, the same are exempted from Service Tax. Such Non-declaration of the Income in the ST-3 Returns is an act of 'suppression of facts' with an intent to evade the payment of Service Tax and therefore, the extended period of Five years provided under the proviso to Section 73(1) of the Act is invokable in the case and accordingly the Appellant is liable to pay tax along with Interest under Section 75 and Penalty under Section 78 of the Act. 2.4 In its reply, the Appellant stated that various contracts/work orders undertaken and executed by them during the material period, were not levied with Service tax and hence, the SCN does not hold any basis to raise the demand of Service Tax. The grounds of the Appellant were as follows: (a) The definition of the taxable services of "Site formation, and clearance, excavation and earthmoving and demolition" provided under Section 65(97a) of the Finance Act, 1994, clearly excludes from its ambit, if such services are rendered in relation to 'Agricul....
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....Appellant as Rs. 30,00,00,000/-(Thirty Crore), they claim the same to be Rs. 3,00,00,000/- (Three Crores) only. They have submitted the statement of 26AS issued by the Income Tax Department stands as a testimony to such claim. 2.5 The Appellant refuted the allegation in the SCN about their indulgence in any 'Suppression of Facts' by virtue of which the extended period of limitation of five (5) Years has been invoked by the Department under the proviso to the Section 73(1) of the Act. It states that their unit was subjected to periodical Audit by the Audit Officers of the Department of Central Excise, Service Tax & Customs wherein, all the relevant documents and records of Business along with the Audited Balance sheet for the material period involved, had been duly scrutinized by the Departmental Officers. The Appellant has further submitted that for the Services not falling under the ambit of the levy of Service tax, they are not supposed to declare/disclose the same in any manner and hence, the non-disclosure of such events in the ST-3 returns for the relevant period does not by itself constitute as an act of 'Suppression of facts'. As such, the intention to evade the payment of ....
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....hearing of the case, Shri K. K. Acharya, Learned Advocate, pleading for the Appellant, reaffirmed their point of view as has been claimed in the Appeal Memorandum. Shree Acharya submitted that on a conjoint reading of the allegations in the SCN and findings in the Original Order, it is evident that the process of demand of Service Tax and the confirmation of the same has been initiated and concluded on the erroneous premise that the Appellant was seeking exemption from payment of Service Tax, on the services rendered by it, for the development of land for agricultural purposes. . This is more evident from paragraph 3.4 of the impugned Order wherein, it has been stated that the Appellant has....... "neither charged nor paid any Service Tax on the aforesaid site-grading and levelling work, claiming the said works as exempted, vide Circular No.B1/6/2005-TRU dated 27.05.2005, being rendered for agricultural purpose". 3.2 Shri Acharya also stated that the services provided to the Contractee-M/s.AMR Constructions (P) Ltd, was in relation to the restoration and maintenance of Water Reservoir and Ash pond. Such activities are not taxable in terms of the exclusion clause specified under ....
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.... finds that the Appellant failed to discharge its obligation cast on it by the statute, which is contrary to settled law, inasmuch as, in cases where an assessee seeks exemption from tax, the onus lies on him to prove the eligibility to such exemption; But in cases where a particular activity is excluded from the levy of tax and taxability thereof is asserted by the Revenue, the onus shifts over to the Revenue to prove that the impugned activity is covered under taxing statute for being taxed. 3.4 Over and above, the Ld. Advocate stressed upon the points that (a) The provisions of Section 65(97a) of the Act does not cast any conditional obligation on the service provider to ensure that the specified land which are/were worked-upon to make it suitable for agricultural use or purpose, has to be indeed used for the intended purpose only. It is not incumbent on the Appellant (service provider) to ensure the use of the said land post-rendition of their services. The findings of the Original Authority as given at paragraph 4.12 of the Original Order that the Appellant "must ensure with documentary support that such lands developed were used for agriculture purpose", shall tantamount to ....
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.... the Respondent-Department, justified the findings of the Order-in-Original and stated that the Appellant are liable for the levy of Service Tax as the Appellant has failed to provide proper reasons/grounds for claiming the exemption from the payment of Service tax. Unless the Appellant proves its eligibility to avail the benefit of exemption from payment of Service Tax, they cannot be relieved of, from the imposition of Service Tax on the services rendered. 4.1 We have carefully heard the arguments put-forth by both the parties and perused the submissions made by them. On a careful assimilation of the subject matter of the Appeal preferred by the Appellant-Assessee before this Tribunal and the Original Order passed by the Original Adjudicating Authority, the following four issues need to be addressed so as to arrive at a decisive conclusion. a. Whether the service rendered by the Appellant-Assessee is correctly classified in the Show Cause Notice which has been duly upheld by the Adjudicating Authority in the Order-in-Original? b. Whether, the services rendered by the Appellant- Assessee is leviable with Service Tax or is specifically excluded from the ambit of the levy of Se....
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....vities of 'construction of road' from the scope of levy of Service Tax. Even otherwise also, we find that the Activities relating to the 'construction of road' has been placed under the exemption notification No.17/2005-ST dated 07-06-2005 so as to grant benefit to the service providers from being taxed. Thus, the Appellant qualifies in its claim for the non-levy of Service Tax on such activity of construction of Road, rendered to M/s.Adhunik Infrastructures Pvt. Ltd. and accordingly, the SCN fails on this aspect. The issue as noted at 4.1(a) (supra) is answered accordingly. 4.4 Rest of the demand proposed in the SCN which has been duly upheld by the Original Authority in its order dated 27/04/2018 is related to the activities undertaken by the Appellant for 7-Nos of Contractees which include the services rendered to M/s.AMR Constructions Pvt. Ltd, Hyderabad. The Original Authority in its order has classified such services rendered by the Appellant under the taxable services of "Site formation, and clearance, excavation and earthmoving and demolition" service and upheld the demand of Service tax on the grounds that the Appellant-Assessee has failed to adduce necessary proof in the....
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....artment for the imposition of levy of Service tax cannot be a mere assertion based on the assumptions or presumptions envisaged in the SCN and instead, such assertions should be 'beyond reasonable doubt' to inflict the levy of Tax upon the Appellant herein. In the present case, the tax imposed on the activities undertaken by the Appellant ceases to have the essence of a Taxable Service, and therefore the rational connection between the Tax imposed and the person on whom it is imposed, ceases to exist. The Revenue Department cannot absolve of its responsibility of onus probandi to prove the activity undertaken by the Appellant is indeed a taxable service under the statute. This issue is no more res integra, as there are many judgements pronounced by various Court of Law wherein it is held the onus of proving the taxability in respect of any event/activity is solely incumbent upon the Statutory Authority. On this front, reliance is placed on the principle decided by the Hon'ble Supreme Court in the case of Union of India V. Garware Nylons Ltd. 1996 (87) E.L.T. 12 (S.C.). The relevant extract from Para 15, is reproduced hereunder: "15. ..........................The burden of proof i....
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....the exclusion clause as provided under Section 65(97a) of the Act, the Original Authority placing all its decision in relation to the availability of benefit of 'Exemption' from levy of Tax is held as erroneous. It is a settled position of law that under a taxing statute, the Jurors finding that the 'service is taxable' is a pre-requisite or "sine qua non" for the levy of tax. Thus, we find the SCN is bereft of any material facts to substantiate the claim made therein and the original Authority has simply went on to confirm the demand made in SCN without applying a judicious Application of mind. The issue as noted at 4.1(c) above is answered accordingly. 4.10 Even otherwise, the Ld. Authorized Representative has failed to place anything substantial to counter the submissions placed by the Appellant before us. The Ld. Authorized Representative raked up alternative grounds of allegations to impose the levy of tax on the Appellant is deemed cadit quaestio, as the said accusations has neither been raised in the SCN nor has any reference in the Original Order dated 27-04-2018. Accordingly, we hold that the Original Order lacks credibility and in the proceedings before us, the entire 'b....