2023 (9) TMI 653 - CESTAT AHMEDABAD

Taxability - Classification of services - Works Contracts Services - electrical installation works undertaken by the appellant during the disputed period - time limitation - suppression of facts or not - HELD THAT:- There must be installation of electrical devices or electronics devices. Whereas appellant are engaged in the business of electrical contractor for State Government and Semi-Governments Department. The nature of business of appellant is both, electrification and electrical material supply through tender from Government Department. In the present matter revenue nowhere provided any invoices or any documents by which it can be conclude that the appellant are engaged in erection, commissioning or installation of electrical and electronic devices. Further, general wiring contracts and fitting thereof are not covered under the above entry. Therefore, the Service tax demand in the present matter not sustainable under works contract services on appellant’s activity.

Time Limitation - Suppression of facts - HELD THAT:- In the facts of the present case that firstly the issue involved is of pure interpretation of legal provisions and classification of services therefore, it cannot be said that the Appellant had any mala fide intentions and have suppressed any fact with intention to evade payment of service tax. It is also on record that the Appellant have represented the matter before department during the investigation of case. This clearly shows that there is no suppression or willful misstatement on the part of the Appellant. Further, Revenue has picked up the figures from the balance sheet and profit and loss account maintained by the assessee.

Reference can be made to Tribunal’s decision in the case of C.S.T. NEW DELHI VERSUS M/S. KAMAL LALWANI [2016 (12) TMI 398 - CESTAT NEW DELHI], laying down that extended period is not invokable if services rendered are reflected in balance sheet and income tax returns and no evidence was produced that non-payment of duty was due to any mala fide.

There are no proof of intent to evade either from the show cause notice or from the impugned order. Mere omission or merely classifying its services under an incorrect head does not amount to fraud or collusion or willful misstatement or suppression of facts. The intention has to be proved to invoke extended period of limitation - demand is time barred and, therefore, cannot sustain. For the same reason, the penalties imposed upon the appellant also cannot be upheld.

The impugned order is required to be set aside - Appeal allowed.