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M/s. Sri Panchajanya Construction Co. Versus CC, CE & ST, Visakhapatnam

2016 (7) TMI 128 - CESTAT HYDERABAD

Demand of service tax from the Sub-contractor - levy of penalty - there was a written agreement between the appellant and main contractor to the effect that the main contractor would discharge the service tax liability of the subject work. That on the strength of such agreement appellant neither paid tax nor filed returns for the subject work. - Held that:- the contention of the appellant that the failure to pay tax was because the appellant bona fidely believed that the main contractor would di .....

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Service. Both being construction services, the contention of the appellant that they believed that services would fall within the category of works contract service is probable and acceptable. - Demand of service tax with interest confirmed - Levy of penalty u/s 77 & 78 waived invoking the provisions of section 80 - Decided partly in favor of assessee. - Appeal No. ST/25489/2013 - Dated:- 16-3-2016 - Ms. Sulekha Beevi, C.S., Member ( Judicial ) Shri Nisha Bineesh, Advocate for the appellant .....

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in contractor to the effect that the main contractor would discharge the service tax liability of the subject work. That on the strength of such agreement appellant neither paid tax nor filed returns for the subject work. 3. During the audit in October 2008, it was observed by department that appellant has not discharged the service tax liability on the services under the said sub-contract. A show-cause notice dated 05/01/2011 was issued raising a demand of ₹ 12,60,720/- towards the taxabl .....

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and penalty of ₹ 5000/- was imposed under Section 77(2) for failure to file half yearly return besides the equal amount of penalty imposed under Section 78 of the Finance Act, 1994. The appellant filed appeal before the Commissioner(Appeals). The appeal was partly allowed by setting aside the penalty of ₹ 5000/- imposed under Section 77(2) of Finance Act, 1994. The demand, interest and other penalties imposed were upheld. Being aggrieved, the appellant has filed the present appeal c .....

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submitted that penalty of ₹ 25,000/- was imposed alleging failure to take registration under the category Commercial or Industrial Construction Service . The appellant had already taken registration under Works Contract Service. The appellant bona fidely believed that the activities carried out by appellant would fall within the category of works contract service. That there was no intention to evade payment of duty. It is also submitted that the appellants failed to discharge the burden .....

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The appellant was fully aware that service tax has to be paid on the services provided. The agreement produced by the appellant is not reliable. The failure to take registration under proper category of service also attracts the penal provision under Section 77. That the penalties imposed are reasonable and justified. 6. I have heard the rival submissions. The appellant has furnished before the adjudicating authority the agreement between appellant and the main contractor. It is observed by the .....

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