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Afcons Infrastructure Ltd. Versus Commissioner of Service Tax, Mumbai

2016 (9) TMI 371 - CESTAT MUMBAI

Demand of service tax with interest - Section 73 and Section 75 of the FA, 1994 – imposition of penalty - Section 78 and 77 of the FA, 1994 – benefit of reduced penalty if paid within stipulated time – Chemplast Cuddalore – works contract service – composition scheme - mobilization advance – ST-3 returns - discharge of tax on demand along with interest - suppression of facts – Held that: - there was a confusion regarding applicability of the tax and the mechanism. In these circumstances, the app .....

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for respondent ORDER The appellant, M/s.Afcons Infrastructure Ltd., received an amount of ₹ 13.2 crore as mobilization advance in March 2007 for the project Chemplast Cuddalore but had not discharged the service tax liability on the said advance. Out of the amount of ₹ 13.20 crore, the appellant adjusted an amount of ₹ 8,57,69,568/- in running account bills and paid the Service Tax thereon under the category of Works Contract Service by opting for the composite scheme and the b .....

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e the service tax liability thereon under the category of Commercial or Industrial Construction Service in terms of Rule 6 (1) of Service Tax Rules, 1994, with an intent to evade payment of service tax. 2. Show cause notice dated 19/06/2009 was issued to the appellant, which has been adjudicated vide impugned order confirming the demand of service tax amounting to ₹ 18,67,340/- along with interest under Section 73 and Section 75 of the FA, 1994, and imposing penalties of ₹ 18,67,340/ .....

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. Aggrieved by the said order, the appellants are in appeal before the Tribunal. 3. The learned Counsel for the appellant argued that there was no suppression of facts. It was argued that though the advance amount was not declared in the ST-3 returns, the appellant themselves disclosed before the audit team that they received the said advance. It was argued that the advance was received in the month of March 2007 but the project actually commenced in the month of July 2007. The learned Counsel a .....

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Hon ble Supreme Court held that when the assessee has already paid tax, they could not change classification of composite service to avail option under works contract service. CBEC also vide Circular No.98/1/2008-ST dated 04/01/2008 clarified that ongoing projects are not eligible for composition scheme. The learned Counsel relied on the decision of the Tribunal in the case of Punj Lloyd Ltd. - 2015 (40) STR 1028 (Tri-Del) to submit that mere non-filing of the ST-3 return is not sufficient to h .....

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