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Commissioner of Central Excise, Lucknow Versus M/s P.C. Construction, M/s Raj And Co, And Vice-Versa Alongwith, M/s. Saraswati Traders

2015 (8) TMI 639 - CESTAT ALLAHABAD

Classification of service - Erection, Commissioning or Installation Service (ECIS) or works contract service - Benefit of 67% Abatement - Penalty u/s 76, 77 & 78 - Invocation of extended period of limitation - Held that:- Works contract service was carved out of Services of CICS, COCS and ECIS which were subject to service tax even prior to 01/6/2007. Works contract service was specifically born w.e.f. 01/6/2007. As per the provisions contained in Section 66F (2) of the Finance Act, 1994 a speci .....

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amount charged as per Section 67 of the Finance Act, 1994. It is observed from case records that appellants are using materials like cement, sand, bricks etc. in providing 'Erection, Commissioning or Installation Service, therefore, benefit of 67% abatement under Notification No. 1/2006-ST dated 01/3/2006 will be admissible for demand for the normal period of limitation. Further benefit of cum-duty has to be allowed to the appellant under Section 67 (2) of the Finance Act, 1994. For quantificat .....

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inance Act, 1994 is admissible. Accordingly, it is held that no penalites under Section 76, 77 and 78 are imposable upon the appellants in these proceedings. - Decided partly in favour of Revenue. - Service Tax Appeal Nos. 659-660 of 2009 & 661 of 2009 with Cross Objection No. 11 of 2010, Appeal Nos. 815-816 of 2009 - final order No. 52176-52180/2015 - Dated:- 6-7-2015 - G. Raghuram, President And H K Thakur, Member (T),J. For the Appellant : Shri R K Mishra, AR For the Respondent : Shri Kapil V .....

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l No. ST/661/2009 filed by the Revenue. 2. Shri Kapil Vaish (C.A.), appearing on behalf of the appellant M/s P.C. Construction and M/s Raj & Co., learned C.A. argued that his clients are providing services of Erection, Commissioning or Installation Service (ECIS) to M/s Bharat Sanchar Nigam Limited (BSNL) in the form of erection of towers for which certain items are supplied free of charge by BSNL and certain other items are used by the appellants. That Commissioner (Appeals) allowed them th .....

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to service tax only as 'works contract service' w.e.f. 1/6/07 and appellants were not required to discharge any service tax upto 31/5/2007. That for the period prior to 01/6/2007, even if held to be classifiable as ECIS, value of free supplies of materials of BSNL are not required to be included in the value as per the law laid down by Delhi High Court in the case of Bhayana Builders (P) Ltd. Vs. CST, Delhi reported in 2013 (32) S.T.R. 49 (Tri. - LB). That for the period after 31/5/2007 .....

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Cenvat credit under Cenvat Credit Rules and service tax paid by appellants would have been available as Cenvat credit and intention to evade payment cannot be attributed to the appellants. It was thus his case that extended period and penalty under Section 78 of the Finance Act, 1994 cannot be invoked. That due to interpretational dispute and harbouring a bonafide opinion that appellant activity is not taxable, there was a reasonable cause for which benefit of Section 80 of the Finance Act, 199 .....

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ification No. 1/2006-ST dated 01/3/2006 because of Sr. No. 5 of this Notification. That service tax was required to be paid on the gross amount including the value of free supplies of goods received from BSNL. Regarding imposition of simultaneous penalties under Section 76 and 78 it was argued that both the penalties were distinct and could be imposed simultaneously at the material time. Regarding taxability of service as erection, commissioning or installation service after 31/5/07, it was argu .....

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Dwivedi, Proprietor of M/s Saraswati Traders vide letter dated 06/7/2015 requested for adjournment as he himself, his wife and Advocate were not feeling well. From the cross objection filed by M/s Saraswati Traders it is observed that more or less same arguments taken by other appellants, are taken in the 'cross objection'. Adjournment request of the respondent in appeal No. ST/661/2009 is rejected and their matter is also taken up for disposed alongwith other appeals. 4. Heard both side .....

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ce (CICS), Construction of Complex Service (COCS) and Erection, Commissioning or Installation Service (ECIS). It is the case of the learned CA that his clients have provided works contract service all through the period involved which became taxable only with effect from 01/6/2007 and, therefore, no service tax is payable by them before 01/6/2007 as no 'works contract service' was existing. We do not agree with the argument of the appellant that no service tax was attracted on the activi .....

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ks contract service' w.e.f. 01/6/2007. The same service even if provided under a works contract before 01/6/2007, will be classifiable under Erection, Commissioning or Installation Service (ECIS). A similar view was expressed by five Member Larger Bench in the case of Larsen & Toubro Ltd. vs. CST, Delhi reported in 2015 (38) S.T.R. 266 (Tri. - LB). 5.1 For the demand period April 2001 to 31/06/2007 learned CA argued that extended period is not applicable as his clients were under the bon .....

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L. It is also not the case of the Revenue that service tax payable was collected by the appellants from BSNL and not paid to the Department. Accordingly, it is held that extended period is not invokable in these appeals. However, the demand on ECIS with respect to normal period of limitation is sustainable. It is also the case of the appellant that value of free supplies made by BSNL is not required to be added while discharging service tax. We find that this issue has been settled by CESTAT Lar .....

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