TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1631
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.... iii) I impose penalty of Rs. 10,88,32,126/- [Rupees Ten crore Eighty Eight lakh Thirty Two thousand One hundred Twenty six only]upon the said party under the provisions of Section 78 of the Finance Act, 1994; iv) For the period w.e.f. 10.05.2008 onwards I refrain from imposing penalty under the provisions of Section 76 of the Finance Act, 1994 since I have already imposed penalty under the provisions of Section 78 of the Finance Act, 1994, supra; However for the period upto 09.05.2008, I impose a penalty on the party at the rate applicable under Section 76 ibid. v) I also impose penalty of Rs. 10,000/- [Rupees Ten thousand only] upon the said party under the provisions of Section 77 of the Finance Act, 1994 All the adjudged dues should be paid forthwith." 2.1 Appellant having Service Tax Registration No. No. AAZPKO11 1HST001, is engaged in providing taxable services namely "Commercial or Industrial Construction Service and "Construction of Residential Complex Service" 2.2 During the Course of Audit, that appellant had constructed Kanshi Ram Multi Specialty Hospital Building at Greater Noida and received amounts of Rs. 4,89,59,489.00 & Rs. 49,77,49,882.00 respectively (t....
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....e Act. 2.7 Being aggrieved, appellant preferred an appeal before the CESTAT which was disposed by the Final Order No 72664/2018 dated 19.11.2018 remanding the matter to the original adjudicating authority 2.8 Impugned order has been passed in the remand proceedings. Aggrieved appellant has filed this appeal. 3.1 We have heard Shri Sanjay Kumar, Advocate for the appellant and Shri Manish Raj, Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submits: CASE OF THE APPELLANT ⮚For the period 01.04.2008 to 30.06.2012 - Rs. 9,87,22,153/- the demand has been made under the category of Commercial Industrial and Construction services. The contracts executed by the appellant are composite in nature, involving transfer of material and provisioning of service. Thus as per decision of Hon'ble Apex Court in the case of L & T [2015 (39) STR 913 (S.C.)], the composite contract work is rightly classifiable under 'Works Contract Services. Since the demand was proposed under the wrong category, therefore the same is liable to be dropped on this ground. Reliance can be placed on the following decisions * National Building Construction Corp....
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....stablishment ⮚demand cannot be made on the value of material/ goods transferred during execution of contract. * Entry 92C of list I of Union list specifies 'Taxes on Services' i.e., Union can levy tax On services only and not on material/ goods. * The benefit of Rule 2A or Composition Scheme should be given to the appellant Reliance is placed on the following decisions: * Nitson & Amitsu Pvt.Ltd.[2018 (4) TMI 1322- CESTAT KOLKATA] * Mehta Plast Corporation [2014 (5) TMI 1131- CESTAT NEW DELHI] * Pooja Marbles [2016 (10) TMI 620- CESTAT NEW DELHI] ⮚Extended period not invokable as the issue involved is Interpretational issue and appellant had no malafide intentions. * Jyoti Buildtech (P) Ltd [2017 (3) GSTL 116 (Tri. - All.)] * K.D. Builders [2018 (6) TMI 799- CESTAT NEW DELHI] * Shanti Builders, [2018 (4) TMI 965- CESTAT NEW DELHI] ⮚Cum tax benefit should have been extended ⮚Interest under section could not have been imposed ⮚Penalty under section 76, 77 & 78 cannot be sustained. 3.3 Learned authorized representative reiterated the findings recorded in the impugned order. 4.1 We have considered the impugned orde....
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....mercial or Industrial Construction Service" Section 65(25b) of the Finance Act, 1994 defines "commercial or industrial construction" as: (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is i) used, or to be used, primarily for; or ii) occupied, or to be occupied, primarily with; or iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads airports, railways, transport terminals, bridges, tunnels and dams Further, Section 65(105) (zzq) of the Act specifies service to any person, by any other person, ....
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.... purposes of commerce or industry. Thus, I find that the service provided by the party for construction of hospital can be classified in either of taxable services i.e "Commercial or Industrial Construction Service" defined under Section 65(105) (z2q) or 'Works Contract service" defined under Section 65(105) (zzzza) ibid, as both equally merit consideration to be classified in any of the said two taxable services 4.6.3 I find that prior to introduction negative list regime; classification of taxable service has to done in accordance to the procedure prescribed under Section 65A ibid The said section 65A ibid entails that: (1) The classification of taxable services shall be determined according to the terms of the sub-clauses (105) of section 65; (2) When for any reason, a taxable service is prima facie, classifiable under two or more sub-clauses of clause (105) of section 65, classification shall be effected as follows :- (a) the sub-clause which provides the most specific description shall be preferred to sub clauses providing a more general description; (b) composite services consisting of a combination of different services which cannot be classified in the ma....
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....hod of charging or invoicing does not in itself determine whether the service provided is a single service or multiple services. Single price normally suggests a single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor for deciding the classification 3.4 .........Specifying a service separately as a taxable service does not necessarily mean or suggest that services falling within the scope of newly specified service were not earlier classifiable under any one of the existing taxable services. Grouping of services under a specific taxable service may change. The scope and coverage of a taxable service are to be determined strictly in accordance with the language of the relevant statutory provision existing during the material period. 4.6.5 From the aforesaid provision of Section 65 A ibid and Board's circular the following facts become apparent that when taxable services cannot be specifically classified the provisions of Section 65A are to be applied for classifying a service. 4.6.6 Also, I found the same has been pronounced in the case of Ace Construction Mines & Mineral....
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.... in the light / of the said decision of the Hon'ble Supreme Court, for which matter the appeal is required to be remanded". On going through the impugned show cause notice, I notice that the demand period involved in the impugned show cause notice is post 01.07.2006 i.e. period involved is 01.07.2008 to 31.08.2013. As such, I find that the cited decision of Larsen & Turbo vis-a-vis taxability of "Works Contract Service" prior to 1sl July, 2006 not applicable in the instant subject matter, as the period involved is way beyond 1st July 2006, even if said construction service is classifiable under "Works Contract Service" or otherwise." 4.4 From the order of the CESTAT remanding the matter back to the original authority it is evident that the matter was remanded to examine the matter with regards to classification of service in light of the decision of Hon'ble Apex Court in case of Larsen and Tubro, supra. Instead of examining the matter in manner as directed by CESTAT, commissioner has recorded the finding as above. 4.5 In case of National Building Construction Corporation Ltd. [2022 (66) GSTL 476 9T-Kol)] relying on the decision in case of Larsen & Toubro, following has bee....
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....erefore, submitted that the contracts require re-examination for which matter would have to be remanded back to the original authority for scrutiny. 6. On the claim of the appellant before the original authority that they were providers of 'works contract service', which is taxable only from 1st June, 2007, the finding in the impugned order that - 'having failed to establish with documentary evidence that there is a transfer of property of goods involved in the execution of the contract which was charged to tax on sale of goods. On this basic criterion, having not been fulfilled, applicability to tax of Works Contract Service involves a remote question. Their contention is, therefore, superfluous being devoid of any substance of law and, therefore, fails before the altar of law' was relied upon by the Learned Authorised Representative to reiterate that the adjudicating authority had no means of ascertaining that these were composite contracts. 7. Having heard both sides on this limited issue, we are of the opinion that the resolution of this dispute lies within the narrow compass of taxability as 'works contract service'. We note the contention of Learned Counsel that the adj....
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....value of property in goods transferred in the execution of a works contract.' 10. In view of this specific decision and the admitted claim of the appellant that they are not providers of 'commercial or industrial construction service' but of 'works contract service', no tax is liable on construction contracts executed prior to 1st June, 2007. 11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviability of tax for rendering 'works contract service'. On the contrary, the submission of the appellant that they had been providing 'works contract service' had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than 'commercial or industrial construction service'. It is already established in the aforesaid judgment of the Hon'ble Supreme Court that the entry under Section 65(105) (zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no....
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....ang.) affirmed by Karnataka High Court in CCE vs. Mahakoshal Beverages Pvt. Ltd (2014) 33 STR 616 (Kar) (ii) Balaji Contractor v. CCE (2017) 52 STR 259 (Tri-Del.))]. (iii) Enpee Earthmovers vs. C.C.E., Goa (2012) 27 S.T.R. 48 (Tri. - Mumbai) (iv) DHL Logistics Pvt. Ltd. vs. CST, Mumbai - I (2014) 36 S.T.R. 874 (Tri. - Mumbai) (v) Marubeni India Pvt. Ltd v/s CST (2016) 45 STR 549 (Tri Del) (vi) Warner Hindustan Ltd v/s CCE (1999) 113 ELT 24 (S.C.) 10.14 Relying on the above cases, the party had submitted that the demand cannot be made ahead which is not proposed in the show-cause notice. There is no dispute in that reference to the proposition made. It is settled principle in law to proceed against any person, the basic requirement is that he should be put to sufficient notice about his contravention and allowed to make proper defense. Since the first show cause notice dated 19.10.2009 has been issued demanding service tax under the category of "Management, Maintenance & Repair Service", the confirmation of demand under any other category, namely "Intellectual Property Right Services" for the period prior to 16.05.2008 cannot be justified and the order to that exte....