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M/s. Punj Lloyd Ltd. Versus C.C.E. &S. T., Rohtak

2015 (10) TMI 2294 - CESTAT NEW DELHI

Liability of Service Tax – Demand confirmed on account of denial of 67% abatement under notification No. 1/2006-ST and under Commercial or Industrial Construction Service category – Appellant contended that credit was duly reversed before passing of order thus entitled to benefit under Notification No.1/2006-ST – Further contended that demand under CICS is not sustainable as services provided to joint venture was in effect service to self and liability of service tax is not sustainable by notifi .....

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d not be used by any other party and hence does not qualify to be called port and appellant is guilty of suppression of facts as it did not pay service tax and also did not file any ST-3 return.

Held That:- Benefit of Notification No.1/2006-ST granted on final product since reversal of credit on input was done at Tribunals stage – Demand under CICS is untenable as Notification No.25/2007-ST nowhere implies that CICS for construction of public port only is eligible for exemption and pr .....

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ent and Mr. R.K. Singh, Member (Technical) Shri Sujit Ghosh, Advocate, Shri Shashank Shekhar, Advocate for the appellant Shri Govind Dixit, DR for the respondent JUDGEMENT Per Mr. R.K. Singh : Stay application along with appeal is filed against Order-in-Original No.24/ST/COMMR/DM/RTK/2013-14, dated 24.06.2013 in terms of which a total impugned demand of ₹ 38,63,21,820/- for the period 01.04.2006 to 31.03.2011 was confirmed along with interest and penalties. Out of the said impugned demand, .....

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ant has contended that (i) when Notification No. 15/2004ST was replaced by Notification No. 1/2006-ST, dated 01.03.2006 an additional condition of non-availment of CENVAT credit on input services was also introduced and due to oversight they took CENVAT of input services amounting to ₹ 32,59,779/-. The said amount was reversed along with interest even before the impugned order and therefore in the light of the judgement of Allahabad High Court in the case of Hello Minerals Water (P) Ltd. V .....

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being a separate legal entity it was in effect service to self and therefore not liable to service tax (ii) the service was provided in relation to construction of port or other port in as much was the construction work for completion of the remaining work of the jetty for M/s. Ratnagiri Gas and Power Pvt. Ltd. (RGPPL) at Dabhol and therefore was not liable to service tax under notification No. 16/2005ST. (iii) There was no wilful mis-statement or suppression of facts and therefore the excluded .....

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l)] has distinguished the case of Hello Minerals (supra) to hold that CENVAT credit should have been reversed before the due date of payment of service tax. It also cited judgements in the cases of CCE, Thane-I Vs. Nicholas Piramal Ltd. [2009 (244) ELT 321 (Bomb.)] and Sunil Hi-Tech Engineers Vs. CCE, Nagpur [2014 (36) STR 408 (Tri.- Mumb.)] (ii) The joint venture between the appellant and M/s. WOGL, London was a separate legal entity and had a separate service tax registration and therefore the .....

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eturns and that this act of evasion would not have been detected but for the audit conducted by the Department. 4. We have considered the contentions of both sides. As the arguments had been heard at length, both sides agreed that the appeal itself could be disposed of. Accordingly, we waive the requirement of pre-deposit and proceed to decide the appeal itself. 5. As regards the eligibility for the benefit of Notification No. 1/2006-ST after reversal of the CENVAT credit taken on input services .....

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4 crores merely for input service credit of just above ₹ 32 lakhs. As regards the possible argument that there is no equity in taxation and exemption Notifications have to be construed strictly, suffice to say that in the case of Hello Minerals (supra) the Allahabad High Court has clearly held as under:- 18. In view of the above decision we are of the opinion that reversal of Modvat credit amounts to non-taking of credit on the inputs. Hence the benefit has to be given of the notification .....

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on in no way necessarily implies that the Supreme Court would have necessarily found it unacceptable if a debit entry in the credit account was made after removal of the exempted goods, particularly when such debit entry reversed the CENVAT credit along with interest before the primary adjudication. Seen in this light the distinguishing effort by CESTAT in the case of Hind lamps (supra) fails to be convincing. The Bombay High Court judgement in the case of Nicholas Piramal (Supra) cited by the l .....

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ip ChhabriaDesigns [2015-TIOL-851-HC-Mum-CX], cited by Revenue to distinguish the judgement in the case of Hello Minerals (supra), we find that the facts in that case were very different in as much as in that case the assessee did not reverse the credit at the time of removal of goods or after removal . Without dwelling further on the subject, we may only add that as on today the judgement of Allahabad High Court in the case of Hello Minerals (supra) continues to be good law with regard to the s .....

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the other component of impugned demand under CICS, the appellant has contended that it was service to self in as much as it rendered service to a loosely formed joint venture which is not a separate legal entity. We find that the said joint venture had taken a separate service tax registration.. Even as per the agreement between WOGL and the appellant, both associated together in a joint venture in accordance with the terms and conditions set out in the said agreement and submitted a joint tende .....

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llant. In these circumstances, we find the contention that the service rendered by the appellant was service to self is untenable. We have examined the nature of service rendered. The service rendered was for completion of the jetty which was for captive use of RGPPL (successor to Dhabol Power Company). Notification No.16/2005ST fully exempts CICS [65 (105) (zzq)] provided to any person by a commercial concern in relation to construction of port or other Port from the whole of service tax leviab .....

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art X Dabhol is mentioned under the Ratnagiri group of ports. It is also seen that Maharashtra Maritime Board Charter lists Dabhol as one of the 48 minor ports on the coastal line. It is also acknowledged by Maharashtra Maritime Board that in the Maharashtra State amongst several self-controlled jetties, Dabhol port is managed by RGPPL. It is thus obvious that the service rendered in relation to completion of jetty at Dabhol was clearly CICS rendered in relation to construction of other port . W .....

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only is eligible for exemption and CICS provided in relation to a private port would not be eligible for the said exemption. The other reasoning feebly given in the adjudication order is that the said jetty is an integral part of a power project. We are not able to appreciate as to how that would affect its status of Dabhol jetty as other port. A port can very well be a captive port of a large project but that does not mean that it does not remain a port by virtue of that fact. 7. In the light o .....

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