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2014 (3) TMI 777 - AT - Service TaxClassification of service - Post construction completion and finishing services - Interior Decorator Service or Commercial or Industrial Construction Service - Extended period of limitation - bonafide belief - The main contention of the learned Advocate is based upon bona fide belief, interpretation of the statute, knowledge of the department and revenue neutrality. - imposition of penalties - Held that:- The activities undertaken by the appellant in the present case are almost identical to those in the case of Spandrel [2010 (5) TMI 299 - CESTAT, BANGALORE]. Therefore, the ratio of the said decision would squarely apply. - The activity undertaken by the appellant falls under both clauses (c) and (d) of Section 65 (25b). Both these clauses do not specify that they should be undertaken in respect of a new building only and even if they are undertaken in relation to an old building, the provisions of these sections would apply. From 2005 onwards, after the introduction of ‘commercial or industrial construction service', the activities of the appellant are very specifically covered under the said provision and there can be no two opinions about the coverage of the same after 2005 whatever the difference of opinion or anything can be is for the period prior to 2005. Regarding knowledge of the department - held that:- The appellant has not shown any evidence whatsoever that the jurisdictional Service Tax officials were informed about the activities of the appellant and, therefore, they were fully aware about them. The jurisdictional Central Excise officials may be aware of the ongoing litigation but there is no evidence to indicate that the Service Tax officials were aware of appellant's activities. Regarding revenue neutral situation - Held that:- If such a theory is accepted, it will lead to a situation wherein the final consumer of goods or services only should be taxed or charged and all other irregularities by various manufacturers or service providers would become non-taxable. It is also noted that service tax authorities issued summons in February 2006 but appellant did not co-operate. Extended period of limitation is sustainable in the facts and circumstances of this case. Regarding levy of penalty simultaneously u.s 76 and 78 - Held that:- Undoubtedly, the appellant has failed to pay the tax chargeable on the services provided by them. Therefore, the ingredients of Section 76 are satisfied - in view of the Hon'ble Kerala High Court judgment in Krishna Poduval [2005 (10) TMI 279 - Kerala High Court], till 2008 when the law was amended, penalty under Section 76 will also be imposable. The appellant has not been able to bring out any reason or proof that there was reasonable cause for failure to take registration and make payment of duty etc. Under the circumstances, penalties under Sections 76, 77 and 78 of the Finance Act, 1994 are imposable. Demand and penalty confirmed - Decided against the assessee.
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