TaxTMI 
TaxTMI 
2023 (11) TMI 1082
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....ations conducted by the department, the Additional Director General (ADG), DGCEI, Chennai issued Show Cause Notice dated 9.10.2015 proposing to demand service tax from the appellant. After due process of law, the adjudicating authority confirmed the service tax of Rs.8,74,99,061/- with interest under the head 'Mining Service'; Rs.60,54,133/- with interest for the services 'Site Formation, Clearance, Excavation, Earth Moving and Demolition Service' and Rs.4,06,83,917/- with interest for 'Supply of tangible goods service'. The adjudicating authority also imposed penalty of Rs.13,42,37,111/- on the appellant under section 78 of the Act and under section 77(1)(a) and 77(2) of the FA 1994. Aggrieved by the above order, the appellant is before the Tribunal. 3. No cross-objection has been filed by the respondent-department. 4. We have heard learned counsel Shri K. Sankaranarayanan for the appellant and Shri N. Satyanarayanan, learned AR for Revenue. 4.1 The learned counsel for the appellant submitted that since the show cause notice was issued by the ADG DGCEI, Coimbatore Zonal Unit answerable to the Commissioner, Coimbatore, the adjudication could not be done by the Commissioner....
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....held. 5 We have gone through the appeal and heard the rival parties. The appeal raises a preliminary challenge to the jurisdiction of the adjudicating authority to adjudicate the matter. The other issues pertain to (i) quarrying of river sand, (ii) leasing services and (iii) site formation service. We shall take up these issues sequentially. All the issues taken up for consideration are listed below for ease of reference. S. No. Subject Para No. Page No. 1. Jurisdiction of the Adjudicating Authority 6 5 2. Mining Service 7 18 2(a) Exigibility of minor mineral 7.3 19 2(b) 'In relation to' mining alone is taxable 7.4 22 2(c) Constitution exempts the property and income of a State from Union taxation 7.5 23 2(d) Sand is excisable goods classifiable under CETA Heading 2505 and can't be taxed under service tax 7.6 26 2(e) The sand is sold hence VAT is applicable and not service tax 7.7 29 2(f) The appellants services are covered under works contract 7.8 30 2(g) Exemption for services rendered to a governmental authority 7.10 32 2(h) Mining services in case of ....
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....ans any officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act. Notification 22/2014 S.T. dated 16.09.2014 appoints inter alia the Additional Director General as Central Excise Officers and invests them with all powers under Chapter V of the Finance Act, 1994, and rules made there under, as are exercisable by Central Excise Officers of the corresponding rank i.e., the Commissioner. As such, it is clear that the Additional Director General, DGCEI, has been vested with the necessary jurisdiction and therefore the argument that the subject Show Cause Notice has been issued without jurisdiction is not tenable. It is also clear from the above that the noticee's argument regarding the exercise of jurisdiction by the officer in the higher hierarchy and the likelihood of bias does not arise since both the officers are in the equivalent rank. As regards the powers of adjudication of the Commissioner, Notification 30/2005-S.T. dated 10.08.2005 as amended ....
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....l the powers of Central Excise Officers as specified in the Table given in the notification, to be exercised within such jurisdiction and for such purposes as specified with effect from 1st July, 2001. By the said Notification all the Commissioners of Central Excise have been given the powers of Adjudication and investigation of such cases, as may be assigned by the Board. 26th June, 2001 Notification No. 39/2001-Central Excise (N.T.) G.S.R. 468(E). In exercise of powers conferred by sub-rule (1) of rule 3 of the Central Excise (No.2) Rules, 2001, the Central Board of Excise and Customs appoints the officers of Central Excise specified in Column (2) of the Table below, and invests them with all the powers of Central Excise Officers specified in column (3) of the said Table, to be exercised within such jurisdiction and for such purposes as specified in columns (4) and (5) of the said Table respectively with effect from 1st July, 2001 TABLE S. No. Central Excise Officers Central Excise Officers whose powers are to be exercised Jurisdiction Purposes (1) (2) (3) (4) (5) 1. All the Commissioners of Central Excise The Comm....
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.... 2. Additional Director General 3. Additional Director 4. Joint Director 5. Deputy Director or Assistant Director 6. Senior Intelligence Officer 7. Intelligence Officer 1. Chief Commissioner 2. Commissioner 3. Additional Commissioner 4. Joint Commissioner 5. Deputy Commissioner or Assistant Commissioner 6. Superintendent 7. Inspector 2. Officers of Directorate General (Vigilance), namely:- 1. Director General (Vigilance) 2. Additional Director General 3. Additional Commissioner (Vigilance) 4. Joint Commissioner (Vigilance) 5. Deputy Commissioner or Assistant Commissioner (Vigilance) 1. Chief Commissioner 2. Commissioner 3. Additional Commissioner 4. Joint commissioner 5. Deputy Commissioner or Assistant Commissioner 3. Officers of Directorate General of Revenue Intelligence, namely:- 1. Director General 2. Additional Director General 3. Additional Director 4. Joint Director 5. Deputy Director or 6. Sen....
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.... Assistant Director (Cost) in Central Excise Commissionerate Assistant Commissioner or Deputy Commissioner 6.4 The above provisions make it clear that Central Excise Officers include officers specified by section 2(b) of the Central Excise Act 1994 or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs with any of the powers of Central Excise Officer under the Act. Rule 3 (1) of the Central Excise Rules 2002 empowers the Board in this regard. The officers may be appointed to exercise all or any of the powers conferred by the Act or Rules. Section 73 (1) of FA 1994 as it stood at the relevant time empowers the Central Excise Officer to issue a notice on the person chargeable with service tax, requiring him to show cause why he should not pay the amount specified. Section 73 (2) ibid empowers the Central Excise Officer to determine the amount of service tax due, or erroneously refunded. Vide notification No. 38/2001 (supra) the Central Board of Excise and Customs has appointed and invested DGCEI officers powers of Central Excise Officers. It is hence clear that the....
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....ite article 'the' in sub-section (1), how is the definite article 'the' in sub-section (1) to be understood? On what should it lean for support to discover its identity? 6.7 The sub-sections of section 73 ibid are intended to deal with different legal issues like the issue of notice and passing of a speaking order etc and one cannot be projected or read into another. Hence sub-sections (1), (2) and (3) although being parts of section 73 operate in independent domains. The phrase 'the Central Excise Officer' appears in both Section 73(1) & (2). Notice under section 73(1) ibid is based on the principles of natural justice. It is the foundation in the matter of levy and recovery of duty, penalty and interest. Hence the sub section is meant to give the noticee the charges made out by the department against him by way of a show cause notice and thereby afford him an effective opportunity to rebut the allegations contained therein and prove his innocence. This notice can be issued only by 'the' Central Excise Officer having jurisdiction in the matter. Whereas section 73(2) caters to the issue of a speaking order. It is a quasi-judicial function to be discharged by an officer/ authorit....
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....ers employees for implementing the provision of Chapter V of the Finance Act, 1994. ***** ***** ***** 145. The expression "Central Excise Officer" is neither defined in the Finance Act, 1994 nor in the Service Tax Rules, 1994 framed under Section 94(1) read with 94(2) of the Finance Act, 1994. Therefore, the definition of "Central Excise Officer" in Section 2(b) of the Central Excise Act, 1944 was made applicable for the purpose of Chapter V of the Finance Act, 1994. ***** ***** ***** 148. The expression and phrase employed in Section 2(b) of Central Excise Act, 1944 is "means" and "any person (including an officer...........)". 149. The definition of "Central Excise Officer" in Section 2(b) of Central Excise Act, 1944 is expansive. It is clear that apart from officers specified therein from the Central Excise Department, any other officer including an officer of the State Government) invested with any of the powers of a Central Excise Officer this Act by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963). 150. Thus, by default all the officer of Central Excise Departme....
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....994 which prescribes a machinery for recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. 192. As mentioned above, under Rule 3 of the Service Tax Rules, 1994, the Board can appoint any other officer to exercise power within the "local limits". However, that would not mean that the officers of "Directorate of Central Excise Intelligence (DGCEI) [presently The Directorate of GST Intelligence]" who are already "Central Excise Officers" under Notification No.38/2001-C.E. (N.T), dated 26.06.2001 for whole of India cannot exercise power pan India. Notification No.22/2014-ST dated 6.09.2014 is to be read in conjunction with Notification No.38/2001- C.E. (N.T), dated 26.06.2001. 193. Therefore, the 2nd argument advanced on behalf of petitioners as far as jurisdiction to issue Show Cause Notice cannot be accepted. 194. Therefore, the argument of some of the counsel for the petitioners that the officer of Directorate of Central Excise Intelligence (DGCEI) [presently The Directorate of GST Intelligence] are not "Central Excise Officer" and cannot exercise function Pan India cannot be accepted. 195. No restrictio....
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...., must follow the directions and only deal with the work which has been allotted to them by virtue of these Circulars. But if an Officer still issues a notice or adjudicates contrary to the Circulars it would not be a ground for holding that he had no jurisdiction to issue the show cause notice or to set aside the adjudication. 6.10 To sum up, the jurisdiction vested in an authority may be classified into (i) territorial or local jurisdiction (ii) pecuniary jurisdiction (iii) jurisdiction over the subject matter etc. The list is not exhaustive. The Central Board of Excise and Customs in exercise of powers conferred by sub-rule (1) of rule 3 of the Central Excise Rules, 2001, may based on the requirement, invest an officer of the central or state government with jurisdiction only over a subject matter like investigation culminating in the issue of a show cause notice to the parties concerned, without investing that authority with the power to adjudicate that matter. If the notice is made answerable to another Central Excise Officer having jurisdiction in the matter there is nothing in law that stops that officer from adjudicating the notice. Neither is the principle of natural ju....
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....ng stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes and any other mineral which the Central Government may by Notification in the Official gazette, declare to be a minor mineral". Since, 01.07.2012, "service" is defined under Section 65B (44) of Finance Act, as under: "Service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,- (1) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force." 7.2 The appellant has made a multi-pronged plea against the exigibility of their activities in relation to mining to service ta....
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....when the sand deposit is underwater. A dredge boat is used to suck up the sand and pump it to a barge or shore-based processing plant. 4. Processing and transportation: Once the sand has been extracted, it may need to be processed to remove impurities or to meet specific size and quality requirements. The sand is then transported to market, where it is used in a variety of applications such as construction, glassmaking, sandblasting etc. Each activity is a service. Service tax is sought to be levied on these activities and not on the mined sand per se. On the contrary the simple act of quarrying without making the sand usable by removing impurities, grading it etc is a process of selective mining and is not a manufacturing process. Hence the nature and characteristics of the mineral does not matter. 7.3.2 The Apex Court, in Association of Leasing and Financial Service Companies v. Union of India, [(2011) 2 SCC 352] had noted: "38...Today with technological advancement there is a very thin line which divides a "sale" from "service". That, applying the principle of equivalence, there is no difference between production or manufacture of saleable goods and prod....
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....on of Section 65(105)(zzzz) to levy service tax on renting of immovable property as opposed to the levy of service tax on the service provided "in relation to renting of immovable property". In other words whether renting of immovable property for use in the course or furtherance of business or commerce by itself would constitute service. The Hon'ble Court held: 69. In view of our aforesaid analysis, we are disposed to think that the imposition of service tax under Section 65(105)(zzzz) read with Section 66 is not a tax on land and building which is under Entry 49 of List II. What is being taxed is an activity, and the activity denotes the letting or leasing with a purpose, and the purpose is fundamentally for commercial or business purpose and its furtherance. The concept has to be read in conjunction. As we have explained that service tax is associated with value addition as evolved by the judgments of the Apex Court, the submission that the base of the said decisions cannot be taken away by a statutory amendment need not be adverted to. Once there is a value addition and the element of service is involved, in conceptual essentiality, service tax gets attracted and the i....
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....y law otherwise provide. Similarly whereas s. 155 of the Government of India Act exempts from federal taxes the Government of a Province in respect of lands or buildings situate in British India or income accruing, arising or received in British India, Art. 289(1). says "the property and income of a State shall be exempt from Union taxation". Section 156 aforesaid has two provisos (a) & (b); (a) relating to trade or business of any kind carried on by or on behalf of the Government of a Province, and (b) which is not relevant, relating to a Ruler. It will be seen that "income" is repeated in both the provisions, but what was "lands" or "buildings" has become simply "property" in Art. 289(1). . 12. The question naturally arises why "income" was at all mentioned when it is common ground that "income" would be included in the generic term "property". It was suggested on behalf of the Union that the juxta-position of the terms "property" and "income" of a State which have been declared to be exempt from Union taxation would indicate that the tax from which they were to be immune was tax on "property" and on "Income", i.e., in both cases a direct tax, and not a indirect tax, whi....
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....rt. 289(1) being in the nature of an exception to the exclusive field of legislation reserved to Parliament, the exception has to be strictly construed, and therefore, limited to taxes on property and on income of a State. In other words, the immunity granted in favour of States has to be restricted to taxes levied directly on property and income. Therefore, even though import and export duty or duties of excise have reference to goods and commodities, they are not taxes on property directly and are not within the exemption in Art. 289(1). (emphasis added) Although initially the seventh schedule to the Constitution did not have a separate entry for service tax in the Union List, the Hon'ble Supreme Court in T.N. Kalyan Mandapam Assn. vs Union of India [2004 Supp (1) SCR 169 / (2004) 5 SCC 632] held that service tax was a subject matter within the "residuary power" of the Union. Subsequently entry 92C was made in the Union List by a Constitution amendment in 2004, [Constitution (88th Amendment) Act, 2004] clarifying that the Union had exclusive authority to impose service tax. Hence the ratio of this judgment would also be applicable to an indirect tax like service tax which i....
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....on of Article 268A in the Constitution vide Constitution (Eighty-eighth Amendment) Act, 2003 which stated that taxes on services shall be charged by the Central Government and appropriated between the Union Government and the States. Simultaneously, a new Entry 92C was also introduced in the Union List for the levy of service tax. As stated above, as an economic concept, there is no distinction between the consumption of goods and consumption of services as both satisfy human needs. It is this economic concept based on the legal principle of equivalence which now stands incorporated in the Constitution vide Constitution (Eighty-eighth Amendment) Act, 2003. Further, it is important to note, that "service tax" is a value added tax which in turn is a general tax which applies to all commercial activities involving production of goods and provision of services. Moreover, VAT is a consumption tax as it is borne by the client." (emphasis added) The Intercontinental Consultants judgment (supra) makes it clear that "service tax" is a value added tax which in turn is a general tax which applies to all commercial activities involving production of goods and provision of services. Hence it....
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.... hence outside the scope of service, is not acceptable. Mere processing of goods by quarrying/ earth work excavating of sand and wet sand and loading in the lorries/ tippers of the consumer cannot be called as production of goods. The goods are not even processed to remove impurities or to meet specific size and quality requirements etc. The incidence of tax in this case is not on the goods i.e. sand but on the service rendered in quarrying/ earth work excavating of sand and wet sand and loading in the lorries/ tippers of the consumer. In Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad, 1995 (76) ELT 241 (SC) the Hon'ble Supreme Court held that where goods are specified in the schedule to the Act they are excisable goods but whether such goods can be subjected to duty would depend on whether they were produced or manufactured by the assessee. As per the facts of this case the appellant is engaged in rudimentary processing of goods which is not amounting to manufacture or production of goods and is a taxable service in relation to mining, hence they are liable to pay service tax. The sand is sold hence VAT is applicable and not Service Tax 7.7 'Sale' involve....
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....on under Section 65 B "Assessee" means a person liable to pay tax and includes his agent as they are agents of PWD they are rendering works contract service. As PWD are doing statutory functions as defined by statue which were covered under 243 W/243G and hence the activity of PWD is outside scope of service /exempted as per circulars /education guide for the period prior to 01-07- 2012 as well as from 01-07-2012. Hence they are also exempt from paying tax. We find that PWD is an arm of Government and cannot be rendering contract service to itself. The appellant is a contractor of CPWD for quarrying / earth work excavating of sand and wet sand and loading in the lorries / tippers of the consumer. The appellant had no rights over the land and the sand, nor was any VAT/ sales tax paid for the said activity as per the various statements given by PWD officials. If a contract is primarily a contract of work and labour and materials are supplied in execution of such contract, it is a works contract. In the appellants case no materials are supplied in execution of such contract. There is only pure service rendered by him by engaging his own laborers and the question of works contract does....
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....sing 8) Road, culverts, bridges, waterways and other means of communication 9) Poverty alleviation programme. We find that none of the activities relating to mining is mentioned in the list above as highlighted by the appellant from the appendix to Articles 243 G and W of the Constitution. Hence this plea of theirs fails. Mining services in case of Neyveli Lignite Corporation 7.11 The appellant has stated hat in the show cause service tax of Rs 4,83,408/- + ED cess Rs 9674/- and SHE cess Rs 4837/- was demanded on the taxable value of Rs 40,30,896/-(copy as Annexure K) They had contended that the value of Rs 40,30,896/- was inclusive of service tax +cess but their reply was not accepted and the demand was confirmed. But it is evident from the answer to Q3 statement dated 23/03/2015 (Annexure L) recorded from Shri R Raju. Chief manager (Finance) of NLC that two running bills were prepared and payment of Rs. 28,31,134/- (including service tax of Rs. 3,11,435/ )and Rs. 13,24, 706/(including service tax of Rs. 1,45, 7224) were made to Shri M. Palanisamy by NLC. It is evident from the ledger account of recovered by the Department from Shri M Palanisamy. (copy e....
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....tions of essentially the same nature." (Salmond on Jurisprudence - Twelfth Edition at page 424) Section 148 of the Contract Act defines "bailment" in the following terms : "148. 'Bailment', 'bailor' and 'bailee' defined. - A 'bailment' is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the 'bailor'. The person to whom they are delivered is called the 'bailee'." 6. Thus in bailment there is transfer of goods for a particular period and thereafter the goods have to be returned to the person delivering them. One of the categories of bailment is hire of chattel. In Halsbury's Laws of England (Fourth Edition) at paragraph 1551 it is defined as follows : "It is a contract by which the hirer obtains to use the chattel hired in return for the payment to the owner of the price of the hiring." 7. It is this category of bailment of goods that is the tax base under section 5-E of the Act. ....
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....e. 10. Whether there is a transfer of the right to use or not is a question of fact which has to be determined in each case having regard to the terms of the contract under which there is said to be a transfer of the right to use. (Emphasis applied) 8.3 The impugned order at para 25 records that both Shri K Diwakar and Shri K Prabhu in their statements dated 24/03/2015 have categorically stated that they did not execute any written agreement with the appellant for hiring the vehicles and the same was based on oral orders. However the appellant had produced "lorry Supply Agreement" purportedly entered into between the appellant and Shri Diwakar, which the learned Adjudicating Authority went on to study and comment upon. We hence examine the agreement. The relevant portion of the agreement with Shri K Diwakar is given below. NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS: 1. In consideration the quantum of payment agreed hereafter reserved and all the covenants and conditions hereinafter mentioned are on the part of the second party to be observed and performed, the first party hereby agree to supply the fleet of lorries to the posse....
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....orries shall be complied with by the Second Party, Second Party shall be liable to the default of the Second Party in observing the said rule, regulation, law and by-laws. 12. That is distinctly understood that the supply under this agreement is for capital equipment as a whole and no, part of the lorry or right in lorry is transferred nor any second party is entitled to avail any credit facility from any bank or financial institution or third party. 13. The First Party expressly stipulates that the Second Party be entitled to peaceful and quiet hold, possess and use the Lorries for all legitimate business purposes without any interruption or disturbances during the term of this Agreement. 14. In case of any dispute between the parties, the matters shall be settled initially by direct negotiations and mutual discussions; should the direct negotiations and mutual discussions fail then the parties may refer the matter to conciliation and mediation through arbitration; by the appointment of sole arbitration should that mechanism also fail, courts in Coimbatore alone will have jurisdiction. 8.4 The crux of the definition Section 65 (105) [(zzzzj) prior to ....
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....ight to title' and its transfer is felt to be not necessary in determining 'effective control' of the transferee over the lorry in the impugned situation. In Indus Tower Ltd Vs Deputy Commissioner of Commercial Taxes, Bangalore [2012 (285) E.L.T. 3 (Kar.)] the Hon'ble Karnataka High Court held that: "64. It is well settled that, whether the transaction amounts to transfer of right or not cannot be determined with reference to a particular word or clause in the agreement. The agreement has to be read as a whole to determine the nature of the transfer. . . . . . . . It is because an owner of a property has a bundle of rights, namely right to possess, right to use and enjoy, right to usufruct, right to consume, to destroy, to alienate or transfer, etc. Therefore, to constitute a deemed sale under Article 366(29A)(d) having regard to the object with the 46th Constitutional Amendment was inserted, it is clear the right that is transferred under a contract should be a bundle of rights minus right to title. It is because of the earlier Constitution Bench judgment of the Apex Court where the right to use the property was transferred by the person who retained the title as only a n....
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....8-S.T. with effect from 16 May 2008. Section 65(105)(zzzzj) levies a service tax on the use of tangible goods. On the other hand, the transfer of the right to use any goods is treated as a 'deemed sale' and is subject to sales tax under Article 366(29-A)(d) of the Constitution of India. It is necessary to distinguish the applicability of these two provisions. Article 366(29- A)(d), provides: "(366)(29-A) tax on the sale or purchase of goods includes- ***** ***** ***** (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; ***** ***** ***** and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." ***** ***** ***** 20. The taxable service is defined as a service which is provided or which is to be provided by any person to another "in relation to supply of tangible goods". The provision indicates that the goods may include....
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....econd party for a definite period as per the contract while the title for the goods remains with the appellant. The second party has to employ his own staff and is not hindered in putting the vehicle to his use as desired. Fuel, minor repairs, goods transit insurance are all borne by him (second party). Hence there is a transfer of right of possession from the appellant to the second party and the effective control over the lorry is with the second party for the duration of the contract. This being so the test for supply of tangible goods prescribed by the Hon'ble Supreme Court in the case of Adani Gas Ltd. (supra) when applies to the Agreement mentioned in the impugned order does not succeeds. No service tax is payable on vehicles supplied as per the said agreement. 8.10 In the case of vehicles supplied without a contract it was for the appellant to show the terms of engagement of vehicle by their clients, to the investigating officers. Both the customers of the appellant and Shri M Palaniswamy (appellant) in his statement dated 22/01/2015 have stated that no written agreements were executed in respect of the vehicles leased out for a short term. The appellant stated that they ....
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....ut an agreement/contract, by the department and informed to the appellant who shall pay the same for supply of vehicles without a contract including those leased out to TAMIN. 9. Site formation clearance excavation, earthmoving and demolition services. 9.1. The appellant has stated that they have not rendered any service with respect to Site formation, clearance, excavation, earthmoving and demolition services. The works were related to road work and that it was for usage for general public and hence eligible exemption Sl. No. 13 under Notin No 25/2012. 9.2 The legal provisions relating to the service as given in the Show Cause Notice are reproduced here under: Legal provisions prior to 30.06.2012: 15. 1.1 Section 65 (97a) defines the terms 'Site Formation, clearance, excavation and earthmoving and demolition services'. There is no direct definition for the said service. The definition includes - • drilling, boring and core extraction services for construction, geophysical, geological or similar purposes; or • soil stabilization; or • horizontal drilling for the passage of cables or drain pipes; or • lan....
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.... of such services. 9.4 The appellant has prayed for considering exemption for their activity under Notification No. 25/2012 dated 20/06/2012 at Sl. No. 13. The said Sl. No. reads: 13. Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) a road, bridge, tunnel, or terminal for road transportation for use by general public; We find that the work is of a composite nature involving site formation. Further the appellant has not been able to show that the work was executed in the formation of a road for the general public. Their activities have been described above by the recipients of service and are consisting of activities related to site formation service. Hence the failure of the appellant to satisfactorily respond to the query raised by Revenue on basic facts which are within their special knowledge, has led to the inference of the appellant providing the taxable service of site formation. Even at this appeal stage they have not been able to demonstrate by way of documents that their principal activities were towards the construction of roads for use ....
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....ST - 2007 (5) STR 118 (Tri. Bang.) b. CCE Vs. Spiced Communication (P) Ltd. - 2006 (4) STR 74 (Tri. Del.) c. CCE Vs. Umakanth & Co. - 2008 (9) STR 527 (Tri. Bang.) d. BPL Ltd. Vs. CST - 2006 (4) STR 307 (Tri. Bang.) e. India Colour Lab Vs. CCE - 2006 (3) STR 180 (Tri. Del.) Further as per the Hon'ble Supreme Court the burden of proving any form of malafides lies on the shoulder of one alleges it. There is no positive act of suppression on the side of the appellant to find willful suppression on their part. In this regard they have relied on the following judgments: - a. Uniworth Textiles Ltd. Vs. CCE, Raipur - 2013 (228) ELT 161 (SC) b. Anand Nishikawa Co. Ltd. Vs. CCE, Meerut - 2005 (188) ELT 149 (SC) c. Padmini Products Ltd. Vs. CCE - 1998 (43) ELT 195 (SC) Moreover, the issue involves interpretation of law and hence extended period cannot be invoked. Similarly, penalty is also not imposable as there was not fraud, collusion or willful misstatement etc. They should be allowed the benefit of Section 80 of the FA 1994 as the appellant had reasonable cause even if it is assumed that they are liable to pay servi....
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.... basis agreed upon over the phone. The customers who hire these vehicles for use in transportation of goods, state that the charges are paid to the appellant in cash through his agents. The SCN note that the appellant did not issue bills/invoice/vouchers to PWD Department for receiving service charges for the services rendered to them. The service charges are paid by PWD based on the works completion details recorded in 'Measurement Book' (M Book) maintained by PWD. In the instant case as per the statement of Shri M Palaniswamy (appellant) dated 22/01/2015 he has not paid VAT/ sales Tax on the service charges amount received from CPWD since no sales of goods were involved. These charges are not denied in the SOF. The statement of various persons recorded during investigation have also not been retracted and have evidentiary value. 10.4 Although the appellant has a fairly long standing in the business with a large fleet of vehicles, he has not been diligently maintaining transaction level records or reporting the activities to the department. This is a standard modus operandi of assessee's who seek not to report taxable activity and evade duty. No VAT/ sales tax is also being pai....
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....ing numerous, and at times contradictory, pleas does not mean that there was a substantial interpretation of law involved. Hence there is no 'reasonable cause' involved to invoke the benefit of Section 80 of the FA 1994. The judgments in Star Neon Singh; Flyingman Air Courier; ETA Engineering Ltd. and Medpro Pharma Pvt. Ltd. (supra) do not come to their help. Hence no reasonable cause has been made out and the penal provision of section 77 (1) and 78 of the FA 1994 has been rightly invoked. The impugned order has not made out a case for imposition of penalty under section 77 (2) ibid and the same is hence quashed. The judgments in CCE Vs. Dial & Travels, Sajjan Kumar Kariwala, Ashok Rastogi, Catalyst Capital Services Pvt. Ltd., Air Express Courier Services, Mitul Engineering Services Vs. CCE, and Gujarat Intelligence Security (supra) stand distinguished. As per the Hon'ble Supreme Court's judgment in Commissioner of Central Excise, Pune Vs M/s SKF India [2009-TIOL-82-SC-CX] interest is leviable on delayed or deferred payment of duty for whatever reasons. Further the Supreme Court, in its decision in UOI Vs. Dharmendra Textile Processors (2008 (231) ELT-3), held that a section p....
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....d to duty would depend on whether they were produced or manufactured by the assessee. G. Mere selective processing of goods by quarrying / earth work / excavating of sand and wet sand and loading in the lorries / tippers of the consumer cannot be called as production or manufacture of goods. No new identifiable goods have come into existence in the process to say that production has taken place. H. The appellant is only rendering service in relation to the mining of sand and no sale of sand is done by him requiring payment of sales tax / VAT, I. If a contract is primarily a contract of work and labour and materials are supplied in execution of such contract, it is a works contract. The appellants activities constitute pure service rendered by him by engaging his own laborers and the question of works contract does not arise. The substance of the contract is hence one of service, hence the service cannot be classified as a 'works contract'. J. No activities relating to mining are mentioned in the list as highlighted by the appellant from the appendix to Articles 243 G and W of the Constitution. The functions of PWD in relation to mining are hence ....
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....not have been revealed had investigations into the appellants' activities not been initiated by the officers of DGCEI. Q. As per the Hon'ble Supreme Court's judgment in Commissioner of Central Excise, Pune Vs M/s SKF India [2009-TIOL-82-SC-CX] interest is leviable on delayed or deferred payment of duty for whatever reasons. R. The Supreme Court, in its decision in UOI Vs. Dharmendra Textile Processors (2008 (231) ELT-3), held that a section prescribing mandatory penalty should be read as penalty for a statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and the adjudicating authority in such cases was duty bound to impose penalty equal to the duties so determined. 13. As a sequel to our above discussion, we are largely in agreement with the decisions taken by the learned Adjudicating authority but for few modifications as under. (a) In the case of vehicles supplied without an agreement / contract including those related to the supply of tangible goods / vehicles to TAMIN the effective control of the vehicles was with the appellant. Tax for the lease of the vehicles will have to discharged as ....