TaxTMI 
TaxTMI 
2026 (8) TMI 521
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....vice tax Rule, 1994. During the course of audit, certain discrepancies were communicated to the appellant vide letters dated 16.03.2020 dated 30.03.2020 and 21.05.2020 and raised certain queries, (a) miscellaneous income received from Mr. Virat Kohli (b) miscellaneous income from M/s Reebok India Company and (c) service tax paid on 40% of the work contract/ original work after 60% abatement as per service tax (Determination of Valuation Rules, 2006). Therefore, a show cause notice was issued by the Commissioner of Central GST, Audit-II Delhi dated 25.06.2020 demanded the service tax as under: (a) Service Tax Rs. 4,37,568/- on miscellaneous income of Rs.30,17,713/- in year 2015-16 as advance amount received from Mr. Virat Kohli forfeited as goods order was not taken away. (b) Service Tax of Rs.43,56,671/- on miscellaneous income of Rs. 30,00,46,008/- in year 2015-16 from M/s Reebok India Company for the goods destroyed in fire broke in the appellant's showroom. (c) Service tax Rs.2,13,30,547/- for alleged wrong availment of abatement on account of work contract, for the period 201415 to 2017-18. 3. The final audit report no....
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....ted/classified work as original works and availed 60% abatement instead 30% as per Service Tax (Determination of Value) Rules, 2006, this cannot be ground for invocation of extended period. Fourthly, it is alleged that miscellaneous income were shown in service tax return, whereas, once it is not for any taxable service, it was not required to be shown in service tax return and merely non-payment of service tax, even if applicable, cannot give rise to invocation of extended period. In Stemcyte India Therapeutics (P) Ltd. v. CCE, (2025) 144 GSTR 662; [14.07.2025], it is held that : "9.3. It is a settled principle of law that, for the department to invoke the extended period of limitation, there must be an active and deliberate act on the part of the assessee to evade payment of tax. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period." The Tribunal in Sunshine Steel Industries v Commissioner of CGST, Customs & Central Excise, Jodhpur (2023) 8 Centax 209 (Tri. -Del), noted that "17. The show cause notice, in the present case, merely makes reference to an audit conducted without e....
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....r, in the said judgment, the High Court referred and relied upon the decision of the Supreme Court in State Bank of India v. B.S. Agricultural Industries (I} - (2009) 5 SCC 121 [para 12] wherein it is held that "12... If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside." (vi) Commissioner of CGST Audit-I acted without authority of law and passed the impugned order: The show cause notice was made answerable to the Commissioner of CGST, Delhi South Commissionerate, but the impugned order has been passed by the Commissioner of CGST Audit-I. In the impugned Order-in-Original dated 12.02.2024, the change in adjudication authority is made through corrigendum dated 10.11.2023. The Board by Circular No. 985/9/2014- CX., dated 22-92014, has limited the power of Commissioner (Audit) to issue show cause notice has directed that such show cause notice shall be adjudicated by the executive jurisdictional commissioner. Similarly, in the GST regime also, by Circular No. 169/01/2022 - GST, dated 12.03.2022, the ....
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....posed under the CGST Act 2017. Therefore, the said officers' power was under the CGST Act and never extended under the Finance Act 1994. Therefore, the entire proceedings under the Finance Act by Central Tax Officers are bad in law. Therefore, the findings recorded in para 1.4 of the impugned order that there is a concurrent jurisdiction of the Central tax officer under the CGST Act and the Finance Act has no basts in law. Further the finding recorded in para 1.2 and 1.3 of the impugned order that by virtue of section 174(2) of the CGST Act authorized the central tax officer to adjudicate the show cause notice issued under the Finance Act 1994, is a complete misunderstanding of the law as said provisions are only a saving clause and does not assign the power of adjudication to the officers. It is respectfully submits that the decision in Rajasthan State Agriculture Marketing Board v C CGST & Central Excise Jaipur (2025) 33 Centax 138 (Tri.-Del) [02-06-2025] is per incuriam and needs reconsideration. It appears that the Tribunal fell in error of law as neither discussed the provisions of law and the notification under which Central Tax officer is appointed, and merely on the ass....
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....rovisions related to Swacbh Bharat Cess and Krishi Kalyan Cess contained under the Finance Act, 2015 and the Finance Act, 2016 respectively, which have also been omitted separately by the Taxation Laws (Amendment) Act, 2017 and not by section 173 or 174 of the CGST Act, 2017, without any saving clause in CGST Act, 201 7 as such there could not saving of such cess under CGST Act, 201 7, which have been omitted separately, therefore, no proceedings could be initiated for recovery of such cess, after omitting of such provisions. (Ref. Kolbapur Canesugar Works Ltd. v Union of India, 2000 (119) ELT 257 (SC) : 2000 (2) SCC 536]. Therefore, once cess itself were abolished neither the cess could have been demanded or any demand on account of cess could have been confirmed. (xii) No service tax is applicable in the present case: The show cause notice has demand tax on following amount, which is confirmed in the impugned order, whereas no service tax is applicable on the same. (a) Service Tax Rs. 4,37,568/- on miscellaneous income of Rs. 30,17,713/-in year 2015-16 as advance amount received from Mr. Virat Kohli forfeited as goods ordered was not taken away. No service tax i....
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....ned Order-in-Original dated 12.02.2024 and allow the present appeal with all consequential relief. 6. On the other hand learned authorized representative submits that the issue of jurisdiction was not raised by the appellant before the adjudicating authority. Therefore, the same cannot be raised at this stage. He further submits that with regard to valuation it is the submission of the learned authorized representative that in the impugned order the actual scope of work under appellant's agreement with M/s Inditex Trent Retail India Pvt Ltd. and M/s H.&M. Hennes & Mauritz Retail Pvt Ltd. and invoices based thereunder and found that activities performed of flooring and tiling, electrical installation, painting, lighting, fire-fighting systems, glazing, HVAC, plumbing, carpentry etc., were carried out upon existing buildings/ structures handed over to the appellant and not upon the vacant land or admittedly abandoned or damage structures. Therefore, explanation 1 to Rule 2A(i) restricts "original works" to, (i) all new constructions, (ii) additions/ alterations to abandoned or damage structures to make them workable, and (iii) erection, commissioning or ....
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....rk undertaken by the appellant is a original work or completion of finishing work. 11. A similar issue was dealt with by this Tribunal in the case of Kalpakaaru Projects Pvt Ltd. vs. Principal Commissioner, CGST Delhi South in Service Tax Appeal No. 50302 of 2022, wherein the Final Order has been passed vide Final Order No. 50769 of 2025 dated 26.05.2025 wherein the facts of the case are that the appellant receives bare structures of newly constructed commercial buildings with roof and floor from its clients and converts them into a modern commercial showrooms/ outlets. This work involves making useable floor, proper ceiling, internal walls and constructing internal walls and partition, HVAC(heating, ventilation and air-conditioning), fire suppression works, plumbing, construction of toilets and other fit-outs as required by the clients. There is no dispute that in rendering these services, the appellant had also used material and, therefore, these services were in the nature of works contract services and were not services simpliciter. What is in dispute is the valuation of these services. The appellant paid service tax considering this work as original work and claiming abatem....
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....contract, then, such value adopted for the purposes of payment of value added tax or sales tax, shall be taken as the value of property in goods transferred in the execution of the said works contract for determination of the value of service portion in the execution of works contract under this clause. (ii) Where the value has not been determined under clause (i), the person liable to pay tax on the service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely:- (A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the works contract: PROVIDED that where the amount charged for works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on twenty-five per cent. of the total amount charged for the works contract: PROVIDED that where the amount charged for works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on thirty per cent. of the total amount ch....
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.... into a complete show room including the electricity, HVAC, plumbing, flooring, ceiling, air-conditioning, partitioning etc. In our considered view, this has to be considered as original work and it cannot be called merely finishing or completion work. If they are considered as original works they will be covered by 2A(ii)(A) of the Valuation Rules and will be entitled to 60% abatement. Service Tax has to be paid only on 40% of the value which the appellant did. We also note it is value taken by previous audit teams who audited the appellants work. Therefore, demand on this count cannot be sustained either on merits or on limitation." 13. Admittedly the work undertaken by the appellant is that the appellant received structures of the newly constructed commercial buildings with roof and floor from its clients and converted them into modern commercial showroom outlets. This work involves making usable floors and ceiling internal walls, constructing internal walls partition HVAC, fire suspension, wall plumbing, construction and other fit outs as requirements of their clients. Admittedly, in all these works executed by the appellant material is involved and the appellant is paying V....