2023 (5) TMI 811

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....ble) dated 20.06. 2012 as amended, the service provider, is liable to pay 50% of the tax that is an amount of Rs.9,56,747.00/-, while the balance 50% is required to be paid by the service receiver. M/s Dipak Paul have discharged service tax liability along with interest and have paid an amount of Rs.10,21,525/- to the department, as share of their liability. 2. Vide show cause notice issued in the matter, the appellant have now been called upon to pay the balance service tax amounting to Rs.8,91,969/- under Section 73(1) of the Finance Act. Commissioner (Appeals) vide his order has fastened the balance liability on the appellants, on the plea that upon completion of the construction of the building M/s THCB had handed over the building to the appellants who upon getting possession of the said building released all funds due as per contract to THCB, towards the construction of their office building and the fact that the appellants are using the said office building, evidence that the appellant fell into the bracket of being the end user/beneficiary/ultimate recipient of the service, and therefore are required to pay the balance 50% of service tax as recipient of service in terms ....

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....the differential payment of tax. For liability under RCM in relation to service rendered by M/s Dipak Paul , no liability can accrue to the appellants, for want of receipt of any service by them from M/s Dipak Paul directly. 7.1 Agenda item number 06 of the Board Note - 06/15/2010 dated 06.10.2010 and 07 Board Note No 07.08.2011 dated 30/03/2011 of TSCBL makes it evident that the contractors as far as the construction of the building is concerned were THCB. It is observed that all correspondence by TSCBL (the appellant) is with THCB and not with M/s Dipak Paul. For greater appreciation the two agenda items are reproduced hereunder : TRIPURA STATE COOPERATIVE BANK LTD HEAD OFFICE : AGARTALA. AGENDA NO. -06 BOARD NOTE NO.-06/15/2010. BOARD OF DIRECTORS DATED:- 06.10.2010 RE :- Construction of Multistoreled building on Bank's own land at Post Office Chowmuhani, Agartala. Tripura State Cooperative Bank Ltd owns and possesses a plot of land measuring 0.644 acres at Post Office Chowmuhani Which is located at the backside of Congress Bhavan, Agartala. The bank has taken a policy decision to construct its multistori....

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....10.2010 in the office chamber of the Hon'ble Finance Minister. After threadbare discussions the CEO , THCB has been requested to recast the Plan & Estimate as decided after discussion and to submit the same to the bank. The revised Plan & Estimate of the proposed building of the bank is placed to the Board of Directors of the bank for examination and according administrative approval and sanction of the required expenditure to THCB for taking further course of action. MANAGING DIRECTOR. The Board of Director of the bank in its 15th meeting held on 11.10.2010 approved the revised plan & Estimate of the proposed building of the bank a prepared by the Tripura Housing & Construction Board with a project cost of Rs. 4.56 crores. Accordingly, Bank has accorded administrative approval and sanction of the expenditure of Rs. 4.56 crores to the CEO, THCB vide bank's letter no. C-2/807(2)/TSCB/Part-111/30893/10 dt. 11.10.2010. Subsequently, Bank has submitted the revised plan of the proposed building of the bank to the Chairperson, Agartala Municipal Council vide bank's letter no. C-2/DEV/GEN/AMC/92 dt. 03.11.2010 for approval. The Managin....

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....m one Sri Nishith RN Bhattacharjee and another Sri Apu Nath Bhowmik of Mohanpur showing their interest for purchase of the land of the bank at Mohanpur. Placed to the Board of Directors for kind perusal and decision. MANAGING DIRECTOR ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- TRIPURA STATE COOPERATIVE BANK LTD HEAD OFFICE : AGARTALA. AGENDA NO. -7 BOARD NOTE NO. -7/18/2011   DATED:- 30.03.2011 BOARD OF DIRECTORS RE:- Construction of Multistoried Building on bank's own land at Post Office Chowmuhani Agartal Vis-à-vis the disposal of bank's land at Mohanpur. Tripura State Cooperative Bank Ltd Owns and possesses at plot of land measuring 0.644 acres at Post Office Chowmuhani which is located at the back side of Congress Bhavan, Agartala. The bank has taken a policy decision to construct its Multistoried building on the said plot of land. The land is at a prime location within the Agartala Municipal Corporation area. The Board the d....

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....rom THCB to M/s Dipak Paul would clearly indicate that the actual contractor is M/s Dipak Paul, and its is their tender against which it is for the construction of the said building is THCB who have issued the said work order. TRIPURA HOUSING AND CONSTRUCTION BOARD AGARTALA : TRIPURA F.No.7 (350)/THCB/DEO(W)/2011/792-809   Date- 13/05/2011 To Sri Dipak Paul S/O - Sri Nityananda Paul 140 Motor Stand Road Agartala, West Tripura Subject : Work order. Name of Work :- Construction of Multi-storied Building of Tripura State Co-Operative Bank at Agartala. DNIT No. 15/THCB/PD-I/2010-11. Sir, Your Tender for the above mentioned work has been accepted on behalf of the Tripura Housing and Construction Board @ 10.00% (Ten percent) only above the estimated cost put to tender i.e. Rs.2,73,27,732.00 (Rupees Two Crores Seventy Three Lacs Twenty Seven Thousand Seven Hundred & Thirty Two) only and the tendered amount comes to Rs.3,00,60,505.00 (Rupees Three Crores Sixty Thousand Five Hundred & Five) only. No deviation beyond the permissible limit will be enterta....

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....at the appellant released funds to THCB for construction of the office building and subsequently THCB in their turn engaged the contractor for such work though is factually correct but the Ld. Commissioner (Appeals) has failed to appreciate its true purport. The mere fact that the appellant are making use of the said building and have moved their office into the same is not the test for the delivery of the service. The end user status/ultimate recipient of service test cannot therefore be interpreted to fix TSCBL as the service recipient directly from M/s Dipak Paul . It is undisputed that M/s Dipak Paul has been engaged at the behest of THCB. There is no contract evidencing engagement of Dipak Paul by TSCBL. 9. As per section 68(1) the Service Tax liability dwells upon the person, providing the taxable service. However, in terms of Notification No. 30/ 12-ST, dated 30.6.12, this liability is divided equally between the service provider and the service recipient - each sharing 50% tax payable. The following facts distinctly emerge in the matter : 1. TSCBL awards contract for construction of a multi-storeyed building to THCB for a consideration of Rs.45600000. The servic....