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2024 (4) TMI 910 - AT - Service TaxLevy of service tax - Works Contract Service - availment of Composition Scheme - GTA service - CENVAT Credit in terms of Rule 6(3) of CCR 2004 - works Contract executed on or after 01.07.2012 under other works contract - Credit denied on the ground that the documents prescribed under Rule 9(1) of the CCR were not submitted - suppression of facts or not - extended period of limitation. Works Contract Service - availment of Composition Scheme on 25.01.2008 - HELD THAT - W.e.f. 01.06.2007 the appellant has been discharging service tax liability on the said service under the Composition Scheme . In the absence of any laid down procedure under the law specifying the time limit we observe that the payment of service tax itself should be construed as exercise of the option by the Appellant when such option was continued by the Appellant till the related works contracts were completed - this issue is squarely covered by the decision of the Tribunal Delhi in the case of MEHTA PLAST CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE JAIPUR 2014 (5) TMI 1131 - CESTAT NEW DELHI wherein it was held that the option to be exercised is not required to be exercised in writing and the very fact of payment of duty under the composition scheme reflects upon the option of the assessee - the appellant is eligible for availment of Composition Scheme for payment of service tax and hence the demand confirmed in the impugned order by denying the benefit is not sustainable - demand set aside. GTA service - HELD THAT - The demand has been mechanically confirmed without verifying the documents submitted the appellant. The documents submitted by the appellant needs to be verified. The demand confirmed without verifying the documents is not sustainable. Accordingly the demand confirmed in the impugned order on this count is set aside and the matter remanded to the adjudicating authority to verify the documents submitted by the appellant and determine the service tax liability if any after giving an opportunity to the appellant to explain their case. The appellant should also cooperate with the department and furnish all the documents for verification. CENVAT Credit in terms of Rule 6(3) of CCR 2004 - providing construction service to Airports Authority of India in Jammu Kashmir and to Unitech Hi-Tech Structure Limited an SEZ unit which are exempted services - HELD THAT - The main objective of the Rule 6(1) is to ensure that the assessee should not avail the CENVAT Credit in respect of input or input services which are used in or in relation to provision of exempted services - In the present case since the appellant has reversed the credit attributable to exempted services along with interest the demand of an amount equivalent to 6/8% of the value of exempted services confirmed in the impugned order is not sustainable - the demand of reversal of CENVAT credit of Rs.37, 91, 781/- in the impugned order is set aside. Works Contract executed on or after 01.07.2012 under other works contract - HELD THAT - The appellant is liable to pay service tax as Original Works on the 40% value of such works contract as prescribed in Rule 2A(ii)A of the Valuation Rules. It is observed that the department has not brought in any evidence to substantiate the allegation that the contracts executed by the appellant were in the nature of completion and finishing service to demand service tax under Other Works on the 60% value of such works contract as prescribed in the said Rules. Accordingly the demand of service tax of Rs. 19, 32, 135/- (including Cess confirmed in the impugned order on this count is not sustainable and hence the same is set aside. Credit denied on the ground that the documents prescribed under Rule 9(1) of the CCR were not submitted - HELD THAT - The invoices were not checked by the audit team on the pretext that the documents are voluminous and will take lot of time and they have to conclude the audit within three days. The audit has concluded that the entire cenvat credit availed and utilised by the Appellant during the period 2009 10 to 2012 13 as irregular and the same has been confirmed in the impugned order. It is observed that the demand has been mechanically confirmed without verifying the documents submitted the appellant. The documents submitted by the appellant needs to be verified. The demand confirmed without verifying the documents is not sustainable - the demand confirmed in the impugned order on this count is set aside - the matter remanded to the adjudicating authority to verify the documents submitted by the appellant and determine the eligibility of Cenvat credit after giving an opportunity to the appellant to explain their case. Suppression of facts or not - extended period of limitation - penalty - HELD THAT - It is a settled position of law that when the matter involves interpretation of statutory provisions and the assessee acted on a bona fide belief extended period of limitation cannot be invoked. We observe that there is no evidence available on record to invoke the extended period of limitation. Accordingly the demand is not sustainable on the ground of limitation also. For the same reason no penalty imposable on the appellant. Appeal disposed off.
Issues Involved:
1. Demand of Service Tax under Works Contract Service. 2. Demand of Service Tax under GTA. 3. Reversal of CENVAT credit under Rule 6(3) of CCR. 4. Demand of Service Tax under 'other works contract'. 5. Reversal of Cenvat Credit disallowed. 6. Invocation of extended period of limitation. Summary of Judgment: 1. Demand of Service Tax under Works Contract Service: The appellant was denied the benefit of the Composition Scheme for payment of service tax on the ground that they had started payment under the scheme prior to officially exercising the option. The Tribunal held that the payment of service tax itself should be construed as exercising the option, following the decision in Mehta Plast Corporation v Commissioner of Central Excise, Jaipur. Therefore, the demand of Rs. 1,19,97,075/- was set aside. 2. Demand of Service Tax under GTA: The demand of Rs. 12,61,280/- was confirmed without verifying the documents submitted by the appellant. The Tribunal remanded the matter back to the adjudicating authority to verify the documents and determine the service tax liability after giving the appellant an opportunity to explain their case. 3. Reversal of CENVAT credit under Rule 6(3) of CCR: The appellant had reversed the proportional credit attributed to exempted services along with interest. The Tribunal held that the demand of an amount equivalent to 6/8% of the value of exempted services was not sustainable, following the decision in M/s. Aster Pvt. Ltd. v CC & CE, Hyderabad - III. Therefore, the demand of Rs. 37,91,781/- was set aside. 4. Demand of Service Tax under 'other works contract': The appellant executed new construction works and paid service tax on 40% of the total amount charged, considering these services as 'original works'. The Tribunal held that the appellant was liable to pay service tax as 'Original Works' on the 40% value and set aside the demand of Rs. 19,32,135/- and Rs. 1,13,323/-. 5. Reversal of Cenvat Credit disallowed: The demand was confirmed without verifying the documents submitted by the appellant. The Tribunal remanded the matter back to the adjudicating authority to verify the documents and determine the eligibility of Cenvat credit after giving the appellant an opportunity to explain their case. 6. Invocation of extended period of limitation: The Tribunal observed that there was no evidence of suppression of facts, and the matter involved interpretation of statutory provisions. Therefore, the extended period of limitation could not be invoked, and the demand was not sustainable on this ground. Consequently, no penalties were imposable on the appellant. Order: (i) Demand of Rs. 1,19,97,075/- under Works Contract Service is set aside. (ii) Demand of Rs. 12,61,280/- under GTA is set aside and remanded for verification. (iii) Reversal of CENVAT credit of Rs. 37,91,781/- is set aside. (iv) Demand of Rs. 19,32,135/- and Rs. 1,13,323/- under 'other works contract' is set aside. (v) Reversal of Cenvat Credit amounting to Rs. 56,58,476/- is set aside and remanded for verification. (vi) Penalties imposed are set aside. (Order pronounced in the open court on 23.04.2024)
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