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2015 (1) TMI 455 - Commissioner - Service TaxConstruction of Commercial/Industrial Complex Service - Invocation of extended period of limitation u/s 73 - Penalty u/s 76, 77 & 78 - Whether the services provided by the appellants during the period of demand fell under the category of ‘Construction of Commercial/Industrial Complex service’ when the contracts allotted were ‘Works contracts’ - Held that:- Services provided by the appellants were taxable during the entire period of demand. Further, the appellants during the investigation proceedings did not provide the documents sought for by the department so that specific nature of the contract/s could be examined and demand could be raised accordingly. The department has resorted to best possible available means to determine the classification of the services provided even when there was intentional avoidance by the appellants to join the investigations or provide the documents/contracts which could enable the department to arrive at the correct classification. Such assessees cannot be let off, but have to be dealt with stringent action so as to have deterrent effect on them. I thus, hold that the demand is sustainable and services are classifiable under ‘Construction of Commercial/Industrial Complex Service’ for the period prior to 1-6-2007 and under ’Works Contract Service’ w.e.f. 1-6-2007. Thus, the demand has correctly been raised and confirmed vide the impugned order which needs no interference on this count. Thus, the first issue stands decided against the appellants. For the ongoing contracts which were classified where service tax has been paid in the respective specified services before being classifiable under the ‘works contract service’, the benefit of composition scheme would not be applicable. Conversely, if no service tax has earlier been paid, the benefit of the scheme would be admissible to assessee. In the instant case the appellants were not registered with the department and they had have not paid any service tax under the category of ‘Construction of Commercial/Industrial Complex Services’ till the filing of appeal. Hence, in view of my deliberations supra, all the pre-requisites of availing the facility under Rule 3(1) of the Composition Scheme, are met with. Benefit under the composition scheme, is admissible to the appellants and the service tax liability needs to be quantified at the prevalent rates specified under the composition scheme during the relevant period and the impugned order requires modification on this issue to the extent discussed above. The second issue thus, decided in favour of the appellants. However, the jurisdictional Deputy/Assistant Commissioner, is required to re-compute the demand within 15 days of the receipt of this order and convey the same to the appellants. The appellants have also contested that the demand was time barred, though no reason whatsoever has been attributed for their claim. On the contrary I observe that the appellants suppressed the fact of provision of services from the department and in spite of initiation of investigations, and repeated communications, did not provide the information sought for. This clearly speaks of their intent to evade payment of service tax by suppressing the facts from the department. Hence, extended period had rightly been invoked and confirmed and the same stands upheld in the present proceedings also. Demand has been made by invoking the extended period of limitation and no period of demand is beyond five years. Hence, this plea of the appellants is devoid of any merits. There is no justification in imposing penalty under Section 76 when penalty under Section 78 of the Act has been imposed. Accordingly, penalty imposed under Section 76 is set aside. As regards imposition of penalty under Section 77 and 78 of the Act, the appellants have not put forth any contentions. However, since the appellants failed to take registration and fulfil the formalities of the Service Tax Law, penalty under Section 77 of the Act has rightly been imposed and stands upheld by me. Further, in view of my observations in para 11 above, I hold that penalty is imposable on the appellants under Section 78 of the Act. - Decided partly in favour of assessee.
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