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2015 (11) TMI 907 - CESTAT BANGALORE

2015 (11) TMI 907 - CESTAT BANGALORE - TMI - Demand of service tax under various categories, by vivisecting the works contract - port services - benefit of abatement to the extent of 60% - benefit of CENVAT credit - Held that:- Whereas the appellant may have a prima facie case in respect of various issues raised by the learned advocate, but it cannot be said at this stage that no tax liability would be fastened on them, whether under the category on which the Commissioner has adjudicated or unde .....

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ould be entitled to exemption notification as also by appreciating the fact that the appellant has not pleaded any financial hardship and taking into account the decision of the Hon’ble Rajasthan High Court in the case of Arjun Industries referred [2015 (6) TMI 110 - RAJASTHAN HIGH COURT], we deem it to accept the offer made by the learned advocate as fair and just and accordingly we direct them to deposit an amount of ₹ 10 crores - stay granted partly. - ST/Stay/22528/2014, ST/Stay/27432/ .....

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; 68 crores stand imposed in one order and similarly in the other appeal, penalties to the extent of ₹ 200/- per day under Section 76 ₹ 10,000/- stand imposed. 2. After hearing both the sides duly represented by Shri Rajesh Chander Kumar, Advocate for the applicant and Shri PRV Ramanan, Special Consultant for the Revenue, it is seen that the appellants were engaged in engineering, procurement and construction of a port with M/s. Krishnarajapatnam Port Company Ltd. (KPCL) in terms of .....

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es. The 3rd show-cause notice dt. 26/02/2013 is for the period April 2011 to March 2012 confirming the demands under the port services category. 3. Learned advocate appearing for the appellant submits that the first demand raised under show-cause notice dt. 19/01/2011 is under various categories like consulting engineer service, technical testing and analysis service, cargo handling service and many more services, which stands raised by vivisecting the works contract entered between the appellan .....

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7-CESTAT-DEL-LB], the works contract could be vivisected into various different activities required to be performed by the service provider, for the period prior to 01/06/2007, when the works contract services were introduced. However, after 01/06/2007, assessment, if at all, is required to be made under the works contract service. He submits that the Larger Bench decision was given on 19/03/2015, by constituting a 5 Member Bench of the Tribunal. Prior to the said decision, there were divergent .....

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07(216) ELT 177 (SC)]. For the period subsequent to 01/06/2007, he submits that the demand has been confirmed by taking the entire consideration received by them from the service recipient, as assessable value of the service whereas in terms of the works contract service, they are entitled to the benefit of abatement to the extent of 60% and further the benefit of CENVAT credit of duty paid on various inputs. He submits that though the Commissioner has observed that the appellants would be entit .....

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007. The benefit of the said notifications have not been extended to the appellant on a simplisitor ground that since the works contract has been vivisected and the demand is being confirmed under various different categories and not under the category of works contract, the benefit under the said notifications cannot be extended. The Commissioner has accordingly not examined the notifications in question. 4. As regards the other two show-cause notices, he submits that the demand has been confir .....

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struction of a port, it cannot be held that the port was already in existence and the services provided by them are port services. In the alternative, submits the learned advocate that even otherwise in terms of the Notifications No.38/2010-ST dt. 28/06/2010 and No.11/2011-ST dt. 01/03/2011, the services rendered in respect of repair, renovation and construction of port are exempted. The benefit of the exemption in terms of the said notifications does not stand granted by the adjudication author .....

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Port is one of the ports listed in the Schedule of the Indian Ports Act, 1908. This itself establishes that the port was in existence even prior to the construction of the same by the present appellant in terms of the agreement. As such, he submits that the appellants plea that the port was not in existence prior to the construction of the same and as such the services rendered by them cannot be held to be port service, is devoid of any merits. As regards the first show-cause notice, he submits .....

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ue fairly agrees with the position. As regards limitation, he submits that the appellant was a registered service tax payee with the Department in respect of other services being undertaken by them and was paying service tax, which reflects upon his knowledge of law. Being aware of his liabilities to pay tax on the various services being rendered by them, they should have also included the present disputed service and should have discharged their duty liability accordingly. He also submits that .....

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e category on which the Commissioner has adjudicated or under any other category of services. On being asked, learned advocate fairly agrees that they are not pleading any financial hardship and they have not placed any evidence to reflect upon the same. However he draws our attention to the provisions of Section 35F of Central Excise Act, 1944 which stands amended w.e.f. 06/08/2014. In terms of the amended provisions of Section 35F, which require an assessee to deposit 7.5% or 10% of the duty c .....

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e Section 35F which are to the effect that the provisions of the said section would not apply to stay applications pending before the appellate authority prior to commencement of the Finance Act, 2014. As such, he submits that inasmuch as the said section was introduced w.e.f. 06/08/2014 when the appellants stay petition was already filed and pending decision before the Tribunal, the same would have no applicability to the facts of the present case, which have to be decided independently by tak .....

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14, otherwise it would be violative of Article 14 of Constitution of India, had adopted the said provision of Section 35F even in respect of stay petitions filed before 06/08/2014. As such, the Hon ble Rajasthan High Court in the said decision had reduced the 50% amount of the tax directed to be deposited by the Tribunal to 10% of the confirmed demand in view of the amended provisions. As such learned advocate submits that in view of the said decision of the Rajasthan High Court, the provisions .....

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