Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2024 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 434 - AT - Service TaxRecovery of Service Tax alongwith interest and appropriation of amount already deposited alongwith penalty under Section 77(1)(a),77(1)(c) &78 of Finance Act, 1994 and Late fees for non filing /late filing of each of half yearly/quarterly returns during the period Oct, 2010 to Sept. 2015 in terms of Rule 7C of the Service tax Rules, 1994 read with section 70 of Finance Act, 1994 - entitlement to benefit of exemption being the services provided by them as a sub-contractor to the main contractor. Whether the adjudicating authority was correct in dropping the demand of Rs 87,14,512/-? - HELD THAT:-The notification 17/2005 -ST dated 07.06.2005 provided exemption to site formation and clearance, excavation and earthmoving and demolition and such other similar activities in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports and other ports with effect from 16.06.2005 - The aforesaid notification exempts all the activities related to construction of public utilities as described above. In the instant case, we note that only the respondent’s contracts are merely for excavation and not construction. The Notification is very clear that such services are exempt only if it is in the course of construction, which is not the case here. There are catena of judgements which hold that the wordings of a Notification have to be interpreted strictly and cannot be expanded to conclude any extraneous interpretation. The issue of the liability of service tax on subcontractors stands settled by the decision of the Larger Bench in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] where it was held that it is not possible to accept the contention of the learned Counsel for the Respondent that a sub contractor is not required to discharge Service Tax liability if the main contractor has discharged liability on the work assigned to the subcontractor.All decisions, including those referred to in this order, taking a contrary view stand overruled. The respondent was liable to pay service tax on the taxable services provided by him for the period prior to 01.07.2012. However, it is observed that adjudicating authority has ordered appropriation of an amount of ₹ 53,31,429/- which was collected as service tax from the service receiver on exempted services and deposited to the Government account in terms of provisions of section 73A (2) of the Finance Act. It would be appropriate to remand the matter to the adjudicating authority for recalculation of the demand, if any, taking into account the amount already so paid. Whether the Commissioner had erred in imposing penalty @50% under section 78 of the Act? - HELD THAT:- It is by virtue of a proviso that the benefit of reduced penalty at 50% has been made available only with effect from 08.04.2011. Consequently, the benefit of this proviso could only have been exercised by the Commissioner for the period post 08.04.2011. In view of the above, it is agreed that the Commissioner has erred in imposing penalty at 50% for the period prior to 08.04.2011. Appeal allowed by way of remand to calculate service tax liability of the respondent for the period prior to 01.07.2012, as well as for recalculation of the penalty under section 78 leviable thereon.
|