2026 (2) TMI 780

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.... However he noticed that the appellant has also provided services to the Zila Panchayat for construction of shop whose contract was entered into on 23.05.2015. He further observed that since the services were provided alongwith material hence the benefit of abatement at the rate of 60% in terms of Rule 2(A)(ii) of the Service Tax (Determination of Value) Rules, 2006 was provided and the service tax of Rs. 41876/- on the abated taxable value(40%) of Rs. 288800/- was confirmed. 5.4 It is pertinent to mention that with the introduction of Notification No 09/2016-ST dated 01.03.2016, a new clause 12A was introduced which states that construction services provided to government/government authority or local authority would qualify for exemption only when the contract was entered prior to 01.03.2015. Thus the plain reading the said notification makes it clear that in order to avail the benefit of exemption the services should have been provided to government/government authority or local authority whose contract should have been entered before the threshold date i.e. 01.03.2015. However in the current scenario, the findings of the Adjudicating Authority are explicit that the sin....

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.... as detailed in Table-A not paid /short paid including Education Cess, Secondary & Higher Education Cess and Swachh Bharat Cess should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994 as amended read with Section 174 of the CGST Act, 2017: (ii) Interest at the appropriate rate should not be charged and recovered from the 'Noticee' in respect of amount of service tax mentioned at S.N. (1) aboveunder Section 75 of the 'Act' readwith Section 174 of CGST Act. 2017; (iii) Penalty should not be imposed upon them in respect of amount of service tax mentioned at S.N. (i) aboveunder Section 78 of the 'Act' read with Section 174 of CGST Act, 2017. (iv) Penalty under Section 77(1)(a), 77(1)(c), 77(1)(d) and 77(2) of Finance Act, 1994 readwith Section 174 of CGST Act, 2017 should not be imposed upon them for their various acts of omission and commission; (v) the late fee / amount under Section 70 of Finance Act, 1994 read with Rule 7(C) of ibid and read with Section 174 of CGST Act, 2017should not be imposed upon them for their various acts of omission and commission." 2.4 The said sho....

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.... (Ten thousand rupees only) upon Shri Surendra Singh, Village Nagla Sukhi, Post Onha, Karhal, Mainpuri under Section 77(1)(d) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017, as discussed above. 7. I impose a penalty of Rs.10,000/- (Ten thousand rupees only) upon Shri Surendra Singh, Village Nagla Sukhi, Post Onha, Karhal, Mainpuri under Section 77(2) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017, as discussed above. 8. I impose a penalty of Rs.20,000/- (Twenty thousand rupees only) upon Shri Surendra Singh, Village Nagla Sukhi, Post Onha, Karhal, Mainpuri under Section 70 of the Finance Act, 1994 read with Rule 7(C) of Service Tax Rules, 1994 and read with Section 174 of CGST Act, 2017, as discussed above." 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals) which was allowed as per order in appeal No 621/ST/ALLD/2022 dated 20.12.2022/26.12.2022 observing as follows: "4.2 I have carefully gone through the facts of the case, the averments made at the time of personal hearing and all other materials/ documents on record. 4.3 It is observed that the appellant neither submitted his defence r....

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....74 of the CGST Act, 2017; (ii) I hereby order to recover interest at the appropriate rate on the above confirmed amount of service tax from hem under the provisions of Section 75 of the Finance Act, 1994 read wlth Section 174 of the CGST Act, 2017; (iii) I hereby impose penalty amounting to Rs.41,876/- (Rupees Forty One Thousand Eight Hundred Seventy Six only) upon them under Section 78 of the Finance Act, 1994,read with Section 174 of the CGST Act, 2017 for their acts of omission and commission as mentioned in preceding paras; (iv) I hereby also impose penalty amounting to Rs.10,000/-(Rupees Ten Thousand only) under Section 77(1)(a) of the Finance Act, 1994, read with Section 174 of the CGST Act, 2017 for their acts of omission and commission as mentioned in preceding paras; (v) I hereby also impose penalty amounting to Rs. 10,000/-(Rupees Ten Thousand only) under Section 77(1)(c) of the Finance Act, 1994,read with Section 174 of the CGST Act, 2017 for their acts of omission and commission as mentioned in preceding paras: (vi) I hereby also impose penalty amounting to Rs,10,000/-(Rupees Ten Thousand only) under Section 77(1)(d) of the F....

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....ication." In my view the approach of the Commissioner (Appeal) is not justifiable for the reason that the entire demand is made against the appellant on the basis of the information made available by the Income Tax department as per the ITR and 26AS of the appellant. It was necessary for the revenue to examine the ITR for previous year and record a finding on the admissibility of the threshold exemption. 4.3 From the prayer made in the appeal before the Commissioner (Appeal) it is evident that the appellant was not questioning the demand confirmed in respect of the services provided to the extent of Rs 41,876/-. I also observe that question of admissibility of threshold exemption under Notification No 33/2012-ST, is not purely a question of law, but a mixed question of fact and law. It should have been taken at the first available opportunity. I find appellant had never claimed this exemption in the first round of litigation and also before the adjudicating authority when the matter was being agitated in the remand proceedings. Thus taking such a plea in the second round of proceeding before the Commissioner (Appeal) may not be justified in view of the decision of Delhi Bench....

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....s without having applied for the registration certificate required under Section 6 of the Act; or contravenes any of the provisions of the said rules or the notifications issued under these rules with intent to evade payment of duty, then all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to any of the provisions to the said rule has been committed or Rs. 10,000/- whichever is greater. Indeed we find no material on record to justify the action of the authority under Rule 25 of the said Rules. It is sought to be contended on behalf of the respondent that there was no strict compliance of the said Rules in-as-much as there was no disclosure of the relevant factors in quarterly returns filed by the appellants. That may be so in relation to the goods which were cleared and not in relation to the goods in question because there was still time for the appellants to file such return. Being so on the said ground, the authorities could not have inv....