TaxTMI 
TaxTMI 
2024 (1) TMI 334
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....I/2012 dated 30.10.2012 (Confirmed demand of Rs. 4,75,52,235/- and imposed penalty of Rs.4,75,52,235/- under section 78 & Rs. 10,000/- under section 77) CESTAT Final Order 09.02.2017 disposed the Appeals filed by the Department and the assessee. Department's Appeal was dismissed and appeal filed by the assessee was allowed by way of remand. 2nd Order-in-Original 36/AP/Commr/2021 dated 12.10.2021 Period of Dispute 2005-06 to 2010-11 Service tax (Amount in Rs.) confirmed vide 2nd O-I-O 3,67,98,828/- Interest As applicable under Section 75 of the Act Penalty Rs. 3,67,98,828/- under section 78 & Rs. 10,000/- under Section 77 of the Finance Act, 1994 Issue Non-payment of service tax on "construction Services Service Tax Appeal No. 52211 of 2016 Show Cause Notice Sr.No. SCN Date period Service Tax(in Rs.) I 23.10.2012 2011-12 3,57,56,467/- II 21.05.2014 2012-13 2,40,39,604/- III 17.04.2015 2013-14 63,11,706/- Order-in-Original DLISVTAX001COM0261516 dated 29.02.2016 Period of Dispute 2011-12 to 2013-14 Service tax (Amount in Rs.) confirmed vid....
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.... the assessee's appeal. The Commissioner passed de-novo adjudication order dated 12.10.2021 confirming service tax of Rs. 3,67,98,828 under section 73 along with interest and imposing penalties under section 77 &78. Service Tax Appeal no. 50097 of 2022 is filed assailing this de-novo order. 3. After the SCN dated 21.4.2011, six periodical SCNs were issued. Three of these SCNs dated 23.10.2012, 21.5.2014 and 17.4.2015 were decided by the Commissioner by Order in Original dated 29.2.2016 which is assailed in Service Tax Appeal no. 52211 of 2016. 4. Three more SCNs dated 18.4.2016, 5.4.2018 and 12.4.2019 were decided by the Commissioner by Order in Original dated 22.6.2022 which is assailed in Service Tax Appeals no. 52133, 52134 and 52135 of 2022. 5. We have heard Shri Atul Gupta, Chartered Accountant assisted by Shri Varun Gaba, Advocate and Ms. Anmol Gupta, Chartered Accountant learned authorized representatives of the appellant and Shri Harsh Vardhan and Shri S K Meena learned authorized representatives for the Revenue and perused the records. 6. The undisputed fact of the contracts involved in all these appeals is that they were composite works contracts involving ren....
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....osal in the SCN dated 21.4.2011 covering the period 2005-06 to 2010-11 to demand an amount of Rs.10,38,86,085/- of which only Rs.3,67,98,828/- has now been confirmed in the impugned order. Rest of the demand is not in dispute. The contracts under which the demand has been confirmed are as follows: Appeal No. ST/50097/2022(2005-06 to 2010-11) Sr. No. Contract/Project Period involved Demand of service Tax in Rs. Classification as per O-i-O Composite or not 1 DMRC Shahdara 2005-2006 341501 Commercial or industrial Construction Service yes 2 MP warehousing & Logistics Corp, Bhopal for construction of Godown 2005-2008 585194 Commercial or industrial Construction Service yes 3 Karnataka State small Indl. Dev. Corp. Ltd. 2008-2010 4939166 Commercial or industrial Construction Service yes 4 Nuclear Power Corporation 2006-07 187556 Commercial or industrial Construction Service yes 5 DDA Shastri park-construction of Barat Ghar 2005-2007 85208 Commercial or industrial Construction Service yes 6 Engineers India Ltd.(IT Building) 2007-2010 10891019 Commercial or industri....
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....013-14) A. SCN 23.10.2012(2011-12) Contract/Project Period involved Demand of service Tax Classification as per O-I-O Composite or not 1 MCD(improvement of drainage system and roads by ready mix concrete in ward 47& 48 in the west Zone) 2011-12 1094199 Management, Maintenance and repair service yes 2 NBCC Chankyapuri(External Site Development work at Netaji Nagar & Moti bagh) 2011-12 7107662 Management, Maintenance and repair service yes 3 NBCC Rohatak(Construction of Mini auditorium at Maharishi Dayanand University Rohatak) 2011-12 1035642 Commercial or industrial Construction Service/Works contract service yes 4 EIL(Renovation of Ayakar Bhawan Vaishali, ghaziabad) 2011-12 78756 Commercial or industrial Construction Service yes 5 NTPC/APCPL Jharli(Construction of Security Barracks and 10 B-Type quarters at Jharli for IGSTPP) 2011-12 213166 Commercial or industrial Construction Service/Works Contract service yes Total 95,29,425 B. SCN 21.05.2014 (2012-13) Contract/Project Period involved Demand of service Tax ....
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....sp; Total 39,56,495 14. In this appeal, the first SCN dated 23.10.2012 was issued for the period 2011-12, i.e., pre-negative list regime. The demands were on composite works contracts involving supply of goods and rendering of services. Therefore, the demands could have been made only under Works Contract Service. Since the demands were made and confirmed under Commercial or Industrial Construction Service and Management, Maintenance and Repair Service in respect of three of the five contracts, they cannot be sustained. The two contracts under which the demand has been made under the Works Contract Service are: A) NBCC Rohatak(Construction of Mini auditorium at Maharishi Dayanand University Rohatak);and B) NTPC/APCPL Jharli(Construction of Security Barracks and 10 B-Type quarters at Jharli for IGSTPP). 15. Services of construction of a mini auditorium at the Maharshi Dayanand University (MDU), Rohtak were covered in this SCN as well as the next SCN dated 21.5.2014. This contract was executed during the period 2011-12 to 2013-14 and demands were raised in these two SCNs for different periods 16....
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....jects including engineering, procurement and construction or commissioning (EPC) projects; (iv) Merely because the university may collect fees from the students does not make the auditorium constructed for the university a building for commercial purposes. (v)For the contracts entered into with educational institutions for the period 2005-06 to 2010-11, CESTAT vide by order dated 09.02.2017 held that no tax is payable. (vi) Without prejudice to above, the service of construction of auditorium for MDU, Rohtak has been taxed under the category of Works Contract Service 65 (105) (zzzza) and the abatement has been granted while confirming the demand, however, the abatement has been given wrongly and the demand has been confirmed on the higher amount. It is to be noted that in the subsequent period i.e., 2014-15 to 2017-18 (up to June 2017) for the same contract the department has provided abatement of 60%, but in the present case, it has provided 40% abatement. (vii) During the post negative list period, the construction of structure meant predominantly for use as educational institution is exempt vide entry 12 (C) of Notification No. 25/2012 dated 2....
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....12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; (d) canal, dam or other irrigation works;........ 21. MDU is a university created by an Act of state legislature and is meant to provide education. Hence, we find that the service of construction of the auditorium in MDU is exempted during after 2012 also. 22. Therefore, the demand of service tax on this contract deserves to be set aside. NTPC/APCPL Jharli(Construction of Security Barracks and 10 B-Type quarters at Jharli for ....
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.... to maintain the records of the material i.e., 'Free of Cost Material', which was provided and consumed in the course of construction itself. 24. Learned authorised representative for the Revenue supports the impugned order. 25. We have considered the submissions with respect to this demand. 26. The undisputed fact is that this contract was a works contract requiring the rendering of service and also transfer or deemed transfer of goods. The demand has also been confirmed under works contract service. Therefore, the appellant will be entitled to abatement towards the materials used in the contract. No service tax can be levied on the value of the goods transferred or deemed transferred while rendering the service because it falls outside the scope of service tax and falls within the scope of the sales tax/VAT levied by the State. It is immaterial whether the VAT was leviable or not, whether it was levied or not and whether it was paid or not. If VAT was payable and not paid, it is for the state authorities to take action. If it was exempted, of course, the appellant does not have to pay it. Under no circumstances can the service tax be levied on the value of the goods tran....
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....ork, involving external water supply system, external sewerage, storm water drainage system, rain water harvesting system, external water supply system, etc. and, (c) Electrical Works, including external light fixtures, supply & laying of LT Cable, etc. c. The above said work is exempt vide entries 12(a) or 12A(a), 12(e) & 29(h) of Mega exemption notification no. 25/2012 - ST dated 20 June 2012. d. Further, horticulture work stands non-taxable by virtue of Negative List of Services defined under Section 66 D of the Act. The Appellant fulfills all the conditions for availing exemption under entry 12A(a) and 12(e) read with Entry 29(h) of Mega exemption Notification No. 25/2012 - ST dated 20 June 2012. Thus, no tax is liable to be paid by the Appellant in this regard. e. The said project was awarded to the Appellant as a sub-contractor by NBCC on behalf of Ministry of Urban Development (MoUD), Government of India (now known as Ministry of Housing and Urban Affairs). MoUD is the apex authority of Government of India to formulate policies, sponsor and support programme, coordinate the activities of various Central Ministries, state governments and other nodal....
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....ly (ii) water treatment, or (iii) sewerage treatment or disposal; 12A. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; 29. Services by the following persons in respective capacities: (h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt; 32. It is undisputed that the work was done in connection with the Central Government quarters which were outsourced by the Ministry of Housing and Urban Affairs to National Building Construction Corporation (NBCC) who, in turn, sub-contracted them to the appellant. Since the civil structure and other works in this case were clearly not meant for commerce or industry but to provide accommodation to the Central Government employees and were rendered to the Ministry of Housing and Urban Affairs, they would be cle....
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.... the demand on construction of auditorium in MDU is set aside and the demand on the construction on flattened factories for HSIIDC is remanded to the Commissioner for verification. The third and last contract in this SCN pertains to EIL (Renovation of Ayakar Bhawan Vaishali, Ghaziabad). According to the learned consultant, this contract was given by the Income Tax Department to Engineers India Ltd. who, in turn, sub contracted the work to the appellant. It was a contract including the material and hence was a Works Contract Service and the demand under commercial or industrial construction service and management, maintenance and repair service are not sustainable. 38. He made an alternative submission that the services, being rendered as a sub-contractor to EIL on a government building (Aayakar Bhavan) being a non-commercial building, is exempted by notification no. 25/2012-ST. 39. Learned authorised representative for the Revenue reiterated the impugned order. 40. We have considered the submissions on both sides. 41. We find that notification no. 25/2012-ST (S.No. 12A) exempts services rendered to a governmental authority on civil structures other than those meant for ....
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....vices rendered in NOIDA SEZ are concerned, no service tax can be levied on such services by virtue of section 7 of SEZ Act. As per Section 51 of the SEZ Act, its provisions prevail over any other laws. These read as follows: "Section 7. Exemption from taxes, duties or cess. Any goods or services exported out of, or imported into, or procured from the Domestic Tariff Area by,-- (i) a Unit in a Special Economic Zone; or (ii) a Developer, shall, subject to such terms, conditions and limitations, as may be prescribed, be exempt from the payment of taxes, duties or cess under all enactments specified in the First Schedule. Section 51. Act to have overriding effect. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act." 44. Therefore, the demand of service tax on the services rendered in the NOIDA SEZ cannot be sustained and need to be set aside. 45. The third contract is the construction of an auditorium in the Kalpana Chawla Government Medical College, K....
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.... CCTV system& miscellaneous work for renovation of Ayakar Bhawan) 2014-15 308185 Commercial or industrial Construction Service 12(a) of Notification No.25/2012-St Total 457040 48. We have already found that the demand of service tax on the services rendered under these two contracts are not sustainable and hence need to be set aside. This appeal therefore, needs to be allowed and the impugned order insofar as it pertains to this demand set aside and we do so. Service Tax Appeal No. 52135 of 2022 49. This appeal assails five demands made under the Statement of Demand (SCN) and confirmed by the impugned order. Of these, we have already held that no service tax is payable on S.No. (1)- work as sub-contractor for NBCC at Kidwai Nagar, New Delhi, and (2)- work as sub-contractor for NBCC in NOIDA SEZ. As far as S.No.(3) services rendered as a sub-contractor of HSCC in Kalpana Chawla Government Medical college is concerned, there is no finding on the appellant's submission that it is covered by notification no. 30/2012-ST and hence as service provider, had to pay only 50% of the service tax which it has already paid. Therefore, this matter al....