TaxTMI 
TaxTMI 
2026 (2) TMI 125
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....ise and M/s. Reliance Infrastructure Limited for handling construction, erection, and commissioning of Independent Power Producer Stations and monitoring their subsequent operations and maintenance and having operational locations spread over the country. The issue under dispute pertains to its Farakka Location falling under Murshidabad District of West Bengal. 2.1. From time to time, the appellant was awarded assignments by M/s. NTPC for providing different services to its Farakka Thermal Power Plant. For successful execution of the said assignments, the appellant had engaged sub-contractors and offloaded them the assignments awarded to it on back-to-back basis, after retaining agreed upon percentage of mark-up as its margin. The appellant had provided various taxable, non-taxable / exempt services including services categorizable under 'Management, Maintenance or Repair Service', Cleaning Service, 'Manpower Recruitment & Supply Agency Service', 'Works contract service' and 'Consulting Engineer Service' to M/s. NTPC Ltd. Being a public limited company, the appellant's books of accounts were subjected to audit by internal audit as well as stat....
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....ars 2012-13 & 2013-14 as per Cost-wise break-up Ledger 2012-13 : April'12 to June'12 Processing of Fly Ash Bricks - Exempt 6,46,457 79,902 Other Entries 3,54,65,965 43,83,593 Sub-total - (i) 3,61,12,422 44,63,495 2012-13 : July'12 to March'13 Processing of Fly Ash Bricks - Exempt 41,84,906 5,17,254 Other Entries 58,45,162 7,22,462 Sub-total - (ii) 1,00,30,068 12,39,716 2013-14 Processing of Fly Ash Bricks - Exempt 39,38,389 4,86,785 Other Entries 1,29,51,695 16,00,830 Sub-total - (iii) 1,68,90,084 20,87,614 Sub-total - B 6,30,32,574 77,90,826 C. Differential tax of payment received during 2012-13 after change in tax rate {2.06% [12.36 - 10.30] } for the services provided during the past periods 1,11,32,069 2,29,321 D. Tax on opening Balance in NTPC Ledger assuming the same has been realized whereas on the payment of Rs. 15,46,104 r....
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....r HC)]. 6.2. Regarding the services of processing of Fly Ash Bricks on job work basis, the appellant's stand is that the said services were exempted in terms of exemption Notification No. 8/2005 - ST dated 01-032005 (as amended). Further, the appellant submits that the recipient of the said services had cleared the goods so processed on payment of appropriate excise duty; that in the impugned order, the demand has been confirmed under the category of 'Business Auxiliary Service' as defined under sub-clause (zzb) of clause (105) of Section 65 of the Finance Act, 1994. To this extent, the appellant has submitted that any service provided in relation to production or processing which amounts to manufacture of excisable goods and excluded from the definition of 'Business Auxiliary Service' given under clause (19) of Section 65 of the said Act. They have also underlined the fact that w.e.f. 01.07.2012, the activity of "any process amounting to manufacture or production of goods" had fallen under clause (f) of the negative list given under Section 66D of the said Act. The appellant has produced particulars of Bills raised during the period from 01-04-2009 to 31-03-2014 for such servic....
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....the impugned order on this count is not sustainable. Issue (C) 8. As regards the demand of Rs. 2,29,321/- towards alleged short paid tax on account of rate change [demand corresponding to issue (C) in the above table] the appellant submits that apart from the payment received for the bills raised during the current period, the appellant, during April, 2012 to Sept., 2012 and Oct., 2012 to March, 2013, had received payments for the bills raised prior to 1stMarch, 2011, levying Service Tax @ 10% ad valorem i.e., at the rate applicable at the time of taxable event and accordingly reported the same in respective ST - 3 Return, as below:. Month Value of Service Total Attracting 10% Rate Attracting 12% Rate April, 2012 3,604,200 3,604,200 - May, 2012 7,958,684 865,792 7,092,892 June, 2012 24,515,947 2,646,089 21,869,858 July, 2012 29,272,149 279,526 28,992,623 Aug., 2012 16,835,413 134,870 16,700,543 Sept., 2012 13,608,298 488,673 13,119,625 Oct., 2012 23,610,820 1,822,008 21,788,812 Nov., 2012 10,269,259 168,487 10,100,772 Dec., 2012 14,212,869 23,682 14,189,1....
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....llant, there is no occasion for making payment of service tax in terms of Rule 6(1) of the said Rules. To this effect, the appellant places reliance on the following citations : a) BPL Ltd. vs CST [ 2006 (4) STR 307 (T - DB)] b) Euro RCSG Advertising Ltd. &Anr. Vs CST, Bangalore [ 2007 (79) RLT 745 (T - DB)] c) Anchor Agencies (P) Ltd. vs CCE, Bhopal [2008 (10) STR 567 (T)] d) Kanpur Security Services vs CCE {2008(10) STR 425 (T)] e) Tempast Advertising (P) Ltd. vs CCE [2006 (4) STR 463 (T)] f) Vijaya Cables vs CCE [2010 (28) STT 422 (T)] Issue (E): 10. In respect of the demand of Rs.2,44,444/- pertaining to issue (E) as enlisted in the table furnished by the appellant (reproduced under paragraph 5 of this Order), it is their contention that while the said demand is double which is considered under Paragraph 2.5 and 2.8 of relevant Show Cause Notice, the same has already been eliminated after considering the evidences under Paragraph 5.25, as below: 0871/Electrical Maint/M/s. Daffodil Construction Service Tax 09-02-2009 1,48,362 Page No. 260 - Sept.'09 0871/Electrical Maint/M/s. Daffodil Construction S....
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....on. It is the case of the appellant that the extended period of limitation is not at all invocable in the present case because the relevant Show Cause Notice was issued pursuant to audit observation vide Audit Memo dated 01.08.2014; thus the allegation suppression of facts thereof stands disproved. Accordingly, it is their submission that the demand confirmed by invoking the extended period of limitation in this case is liable to be set aside. 14. The Ld. Authorized Representative of the Revenue has reiterated the findings of the ld. adjudicating authority as recorded in the impugned order. In particular, the Ld. Departmental Representative places reliance on the written submissions dated 17/20.03.2017 tendered by the Revenue in relation to the Grounds of Appeal urged by the appellant. Thus, the Revenue prays for upholding the impugned order and rejecting the instant appeal preferred by the assessee. 15. Heard both sides and perused the case records. 16. We find that demand of service tax of Rs.1,93,13,972/-, has been confirmed in the impugned order under the category of 'Management Maintenance or Repair Service'. The appellant has submitted that a portion the serv....
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.... of the claim of rendering the said services and quantifying the correct Service Tax payable, the issue needs to be remanded back to the adjudicating authority. 18. As regards the activity processing of fly ash bricks provided by the appellant, we find that the demand of service tax on the said service has been confirmed under the category of Management, Maintenance and Repair service. The Appellant has submitted that the said services provided by them were exempt vide Notification No. 8/2005-ST dated 01.03.2005 as amended vide Notification No. 19/2005-ST dated 25.04.2006 till 30.06.2012 and thereafter vide entry S. No. 30 (c) of Notification No. 25/2012-ST dated 20.06.2012. For ease of reference, the Notification No. 8/2005-ST dated 01.03.2005 is reproduced below: - "Notification No. 8/2005-S.T., dated 1-3-2005 In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of production of goods on behalf of the client referred in sub-clause ....
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....o 30.06.2012. The activity has also been included in the Negative List and not liable to Service Tax for the period after 30.06.2012. For the period after 01.07.2012, such activities are covered by entry S. No. 30 (c) of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012, reading as "carrying out any intermediate production process as job-work in relation to any goods on which appropriate duty is payable by the principal manufacturer". However, in respect of the activity of 'processing of fly ash bricks', we find that the appellant has not produced any documentary evidence to substantiate their eligibility towards the above claim/(s) for exemption. Thus, we are of the opinion that for the purpose of verifying the correctness of the claim made by the appellant regarding rendering of the said service, the issue needs to be remanded back to the adjudicating authority. 19. As far as the rest of the demand pertaining to the issues mentioned in (A) and (B) of the said Table is concerned, it has been contended by the appellant that the Reconciliation drawn between the value of services as per audited Trial Balances and the value of services declared in ST - 3 indicates that th....
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.... mean that unless payment is actually received by the appellant, there is no occasion for making payment of service tax in terms of Rule 6(1) of the Service Tax Rules. However, the appellant needs to provide the evidence of issue of the invoice prior to 01.04.2011 and receipt of payment for the same after 01.04.2011, which aspect is required to be verified. 20.2. The demand of Service Tax confirmed in respect of the issue (E) of the Table has been claimed by the appellant as double demand. If it is established by the appellant as double demand, then the said demand confirmed in respect of the issue (E) (supra) would not survive. 20.3. Regarding the demand of Rs.10,00,000/- [pertaining to issue (F) supra], the appellant has claimed that it was due to clerical error. This claim of the appellant needs to be verified. If the same is due to a clerical error, as claimed by the appellant, then the said demand would not survive. 21. Thus, we are of the view that these issues [i.e., issues (C), (D), (E) and (F) supra] need to be remanded back to the adjudicating authority for the purpose of verification of the correctness of the claims made by the appellant. 22. We have also exa....