TaxTMI 
TaxTMI 
2026 (1) TMI 579
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.... I. I drop the proceedings initiated vide Show Cause Notice No. 53/JC/GBN/2021 dated 21.10,2021 and consequent thereto drop the entire demand of service tax Rs. 99,40,539/- (inclusive of cess) (Rupees Ninety Nine Lakh Forty Thousand Five Hundred Thirty Nine only) on value of the services so provided by M/s. Stone Heights Infra, 22, Akash Puram Vistar Shyam Gani, Pilibhit Bypass, Bareilly (U.P) during the financial year 2016-17 on the grounds as detailed and discussed in the foregoing paras II. I confirm the demand of service fax amounting to Rs, 3,72,168/-(Rupees Three lakh seventy two thousand one hundred sixty eight only) on the value of Rs. 24,81,122/-, under proviso to Section 73(1) of the Finance and Section 174 of Central Goods & Services Tax Act, 2017 and order to recover the same from them under section 73(2) of the Act ibid. III. I confirm the demand of Interest at appropriate rate against demand at SI No.(i) above and order for recovery of the same under Section 75 of the Finance Act, 1994 read with Section 142(8) and Section 174 of Central Goods & Services Tax Act, 2017 IV. I impose the penalty of Rs. 3,72,168/-(Rupees Three Lakh Seventy ....
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....onstruction Pvt. Ltd. & other Govt. entities to whom the works of road for public use were allotted by the Government. The appellant also submitted copies of Balance Sheet and form 26AS but failed to provide copies of contracts entered with above contractors as subcontractor as well as copy of contract entered by the above contractors with Govt. department / copy of contract entered between appellant and Govt. department in support to their claim that payment is received in connection of repair, alteration of Road, bridge etc. for use by general public. 2.4 As the appellant did not provide the mandatory documents like copies of Agreements with various contractors Government department, details of receipt of payments, copy of bank statements etc., the services provided by the appellant were taxable under Section 65(B) of the Act and the appellant was liable to pay service tax. The service tax short paid was as computed in the table below: Period Gross amount received in Rs Service Tax Rate Service Tax not paid in Rs 2016-17 6,87,51,383 15% 1,03,12,707 2.5 A Show Cause Notice dated 21.10.2021 was issued to the appellant asking them to show cause as to wh....
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....e appellant during the F. Y 2016-17. However, the adjudicating authority observed that there is a receipt of Rs. 24,81,122/- in excess over contract value of Rs. 65,00,000/- from M/s. Iqbal Construction Company during 2016-17 as per 26AS and the appellant has not submitted any documents such as copy of work order, tax invoice etc. in support to their claim. Accordingly, adjudicating authority confirmed the demand of service tax of RS. 3,72,168/- on above stated consideration of Rs. 24,81,122/- received by the appellant over and above the contract value of Rs. 65,00,000/-. 6.3 Now, the issues for determination before me is whether demand and recovery of Service tax of Rs. 3,72,168/- on consideration of Rs. 24,81,122/- received by the appellant over and above the contract value of Rs. 65,00,000/- under proviso to Section 73(1) along with interest under Section 75 and penalties under Section 78, Section 77(1)(a), Section 77(1)(c) and Section 77(2) of the Act is justifiable or not. 6.4 I note that the appellant has pleaded that the additional payment of Rs. 24,81,122/- is also pertains to construction of road, bridge etc. for use by general public and this amount is f....
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....cannot be concluded that the amount of additional consideration of Rs. 24,81,122/- pertain to these supply and invoices as the total amount of these invoice is Rs. 2,30,18,879/- which does not tally with the amount in question Further, I find that the appellant has not provided any document/ evidence on the basis of which it may be concluded beyond any reasonable doubt that the amount of additional consideration of Rs 24,81,122/- pertain / related to above mentioned supply of sand and grit 6.8 The appellant has also produced a certificate issued by M/s. Iqbal Construction Company to the effect that they have paid against the contract receipt Rs. 64,81,122/- to the appellant and due to accountant's mistake Rs. 25,00,000/- has been shown in IT TDS but the above amount is for supply payment. However, on perusal of 26AS submitted by the appellant I find that there is negative entry of Rs. 25,00,000/- which shows that the wrong entry of Rs. 25,00,000/- was duly got corrected by way of withdraw of above amount from 26AS. 6.9 I am of the view that without benefit cannot be extended to any person or party. I am of opine that exemption notification should be interprete....
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....ere ingredients of fraud, collusion, willful mis-statement, suppression of facts etc. with an intent to evade tax are present. It has already been observed that all the receipts on account of collection of fees and all income shown under various heads were duly recorded in the books of accounts of the appellant and have been admitted to have been deposited by the appellant in the designated bank account and the same has been confirmed by Income Tax Authority via providing 26AS. This fact is sufficient to hold that there is no reason with the appellant to have any intention to suppress any fact relating the said transaction that too evades the service tax." 4.4 As impugned order has not recorded any finding in respect of the submissions made by the appellant challenging the order in original on the ground of limitation, I have no hesitation in holding that the order is non speaking to this extent. 4.6 Show cause notice has recorded as following for invoking the extended period of limitation for making the demand of service tax: 7. And whereas it appeared that the party has suppressed the material information relating to receipts of consideration on account of providin....
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....able services under the category of work contract to services to various contractors who were providing services to various government authorities, which have been held to be exempt from payment of service tax by the adjudicating authority. During financial year 2016-17, it is observed that appellant had provided services to one such contractor namely M/s Iqbal Construction Company. Impugned order records that contracts entered between the appellant and M/s Iqbal Construction Company were as follows: S No Document Work undertaken Amount Nature Date 1 Agreement 15.01.2017 Construction of Road work at Seramau Road Zila Shahjahanpur 65,00,000 2 Agreement 02.01.2017 Construction of Road work at Road Bhitoura behedi Zila Bareilly 4,00,00,000 Total 4,65,00,000 Against above contracts as per the 26AS of the appellant in total received a sum of Rs 4,89,81,122/-. The demand has been confirmed only on the excess receipts of Rs 24,81,122/- over the value of contracts entered between the appellant. The value which was covered by the contract has been held to be exempted. Appellant has claimed that the excess....
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....oviso to the section. 11. Both the appellate authorities, viz. the Commissioner of Customs and Central Excise (Appeals) and the Tribunal, rejected the claims of the appellant and affirmed payment of duty and penalty. They reasoned that since the appellant procured the furnace oil not for its own captive power plant, but for that of another, it could not claim exemption from payment of duty; entitlement of duty free import of fuel for its captive power plant lies with the owner of the captive power plant, and not the consumer of electricity generated from that power plant. Little or no attention was paid to the issue of limitation, which in our opinion, is the primary question for consideration in this case. The Tribunal only made the following observations in this regard : "2. ... He however, submitted that the demand of duty is barred by limitation as the show cause notice was issued on 2-8-2001 by demanding the duty for the period January/February 2001; that the Department was aware that the appellants do not have power plant and as such furnace oil could not have been used by them captively; that this is evident from letter dated 17-7-2001... 4... The ....
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.... cause notice, a requirement that the show cause notice in the present case fails to meet. In Aban Loyd Chiles Offshore Limited and Ors. (supra), this Court made the following observations : "21. This Court while interpreting Section 11-A of the Central Excise Act in Collector of Central Excise v. H.M.M. Ltd. (supra) has observed that in order to attract the proviso to Section 11-A(1) it must be shown that the excise duty escaped by reason of fraud, collusion or willful misstatement of suppression of fact with intent to evade the payment of duty. It has been observed : "...Therefore, in order to attract the proviso to Section 11-A(1) it must be alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Rules made thereunder with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had bee....