TaxTMI 
TaxTMI 
2026 (7) TMI 154
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....tion, Tamil Nadu Housing Board, Tamil Nadu Police Housing Corporation and others. 2. It is the case of the Department that the appellant had rendered taxable construction services and failed to discharge applicable service tax liability on the consideration received, leading to issuance of show cause notice proposing demand of Rs.1,82,28,130/-. The said proceedings culminated in Order-in-Original No. 91/2015-16 dated 28.01.2016, wherein the adjudicating authority confirmed substantial demand of service tax along with interest and imposed penalties, including a penalty of Rs.1,79,47,197/- under Section 78 of the Finance Act, 1994, apart from penalty of Rs 10,000/- under Section 77 of the Act. 3. Aggrieved by the confirmation of demand and imposition of penalties, the appellant has preferred the present appeal before this Tribunal. 4. The Ld. Advocate Shri J. Shankar Raman appeared on behalf of the Appellant. The Ld. Authorized Representative Ms. G. Krupa appeared for the Revenue. 5.1 The Ld. Counsel for the Appellant assailed the impugned order and submitted that the entire demand is unsustainable both on facts and in law. It was contended that the declaration filed by t....
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....x wherever applicable. It was argued that there was no suppression of facts or intention to evade payment of tax and consequently the extended period of limitation and penalties imposed under the Finance Act, 1994 are wholly unsustainable. The Learned Counsel therefore prayed that the impugned order be set aside in entirety and the appeal be allowed with consequential relief. 6. Per Contra, the Ld. Authorized Representative Ms. G. Krupa reiterated the findings of the Impugned Order. 7. We have carefully considered the rival submissions, the records of the case, the impugned order, the provisions of the Finance Act, 1994, the Voluntary Compliance Encouragement Scheme, 2013 and the judicial precedents relied upon by both sides. 8. Upon consideration the following questions arise. i. Whether the service tax demand on the alleged services rendered to SRM Medical College and Hospital, SRM Engineering Construction Corporation Limited; Tamil Nadu Housing Board - Slum Tenements at Vellakuttai Eri, Salem; Tamil Nadu Police Housing Corporation Ltd., Mahalakshmi Plaza and GVN Nursing College, Short paid tax due to difference in P & L and ST-3 in 2012-2013 are liable to servi....
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....ding circular while determining tax liability. 12. Further, the Tribunal Chennai in the case of M/s. Shree Mahalakshmi & Co. Vs. Commissioner of GST and Central Excise [F.O .No. 40443/2025 dated 17.04.2025] has held as under: - "10. Unlike a statutory exemption notification issued in exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, prescribing conditions, the circulars issued by CBEC are under Sec. 37B of the Central Excise Act, 1944, as applicable for the purposes of service tax vide Sec. 83 of Finance Act, 1994 and are instructions and directions issued to the central excise officers for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties. The Hon'ble Supreme Court has held in CCE, Bolpur v Ratan Melting & Wiring Industries, 2008 (231) ELT 22 (SC), inter-alia, that so far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. 11. Therefore, unlike an exemption notification with conditions stipulated therein to claim the exemption, the benefit of which wh....
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....tual arrangements. 14. The appellant has contended that the description of work containing the shopping complex as a small part of the construction to facilitate the incumbents and trainees to get the refreshment and canteen services within the campus. Since the academy is located in the outskirts of the city there is no shopping facility nearby to enable the police personnel to get the basic essential requirements. The facility of refreshment and canteen is not meant for common public and is not for any commercial purpose. The facility is available only for the police personnel within the campus undergoing the training and commodities are provided there at the subsidized rate by the government of Tamil Nadu. They also provided a Certificate dated 29.04.2016 in this regard which indicates non-commercial in nature. These contentions remain unrebutted. 15. The Department has proceeded on the assumption that the Tamil Nadu Police Housing Corporation project acquired commercial character because a small portion of the project contained shopping or canteen facilities. We find such reasoning fundamentally flawed. The records indicate that the overwhelming portion of the project rel....
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.... filed conceded that there was no transfer of property and that in respect of the supply of manpower agency services rendered, since appellant has discharged only service tax at the rate of 50%, the appellant is liable to pay balance 25% in terms of Sl. No. 8 of Notification No. 30/2012 dated 20.06.2012 subject to limitation. We find that the appellant is liable to pay service tax to this extent as admitted along with applicable interest. Ordered accordingly. Issue No.(ii) Whether the VCES Declaration Attained Finality and Whether the Impugned Services are Taxable under the Finance Act, 1994? 21. The principal foundation of the impugned order is the conclusion that the declaration filed by the appellant under the Voluntary Compliance Encouragement Scheme, 2013 (VCES) was "substantially false" within the meaning of Section 111 of the Finance Act, 2013 and consequently liable to be reopened, leading to confirmation of service tax demand for the VCES period. The main question which therefore arises is whether the Department could legally reopen a declaration already accepted under the Scheme and whether the services rendered by the appellant were taxable in the manner alleged in....
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.... Scheme itself. In terms of Section 106 read with the statutory framework governing VCES and CBEC Circular No. 170/05/2013-ST dated 08.08.2013, where the designated authority proposes to reject a declaration on the ground that it is false or not admissible, such action must necessarily be initiated within the prescribed statutory period of 30 days. The legislative object behind prescribing such strict timeline was to ensure certainty and finality, which formed the very foundation of the amnesty scheme. 26. The records show that the appellant had filed revised declaration under VCES on 28.12.2013 and the same was accepted by the Department. It is not disputed that no proceedings questioning the declaration were initiated within the statutory period contemplated under the Scheme. The show cause proceedings seeking to reopen the declaration were initiated only subsequently, long after expiry of the statutory period. Once the declaration stood accepted and the Department failed to act within the prescribed period, the proceedings attained finality. 27. This legal position stands reinforced by the decision of the Tribunal in Aqua Bases Container Services Pvt. Ltd. v. Commissioner ....
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....d under the Scheme, the Department lacked jurisdiction to reopen the declaration thereafter. Issue No. (iii) Limitation and penalty 31. Regarding the difference in P & L and ST-3 returns, we find merit in the appellant's contention that the service tax liability was computed on consideration received and reconciled with audited balance sheet for the year 20122013 which was submitted to the department during the course of audit and also during investigation by the DGCEI providing the detailed computation in the appeal grounds. It is observed from the above statement that there is meager difference that is to say only rounding off difference and the appellant did not ignore or leave out any part of the taxable service consideration received for the purpose of calculation of the tax and entire service tax due has been discharged for the 2012-2013 well before the issue of show cause notice. 32. Thus, the demand raised merely based on the difference in P & L and ST-3 is unsustainable as there is no deliberate or positive act of suppression invoked with intent to evade payment of tax relied upon in the Show Cause Notice, the applicability of Section 73(3) of Finance Act, 1994 ou....