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M/s. B.L. Mehta Construction Pvt. Ltd. Versus CCE & ST, Chandigarh

2017 (8) TMI 520 - CESTAT CHANDIGARH

Works Contract Service - jurisdiction to adjudicate SCN - unregistered assessee - Held that: - at the time of the execution of work, the appellant was not registered with the Central Excise/Service tax department. In that circumstance, the jurisdiction falls where the appellant has executed the work. Admittedly, in this case, the work has been executed at Chandigarh, therefore, the cause of action arose at Chandigarh and the Commissioner of Central Excise, Chandigarh-II has no jurisdiction for t .....

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73A of the Act by appellant. Therefore, section 73A of the Act is not invokable. - Appeal allowed - decided in favor of appellant. - Appeal No. ST/58107/2013-(DB) - Final Order No. 61480/2017 - Dated:- 9-8-2017 - Mr. Ashok Jindal, Member ( Judicial ) And Mr. Devender Singh, Member ( Technical ) Shri Jagmohan Bansal, for the appellant Shri Harvinder Singh, AR for the respondent ORDER Per Ashok Jindal The appellant is in appeal against the impugned order confirming the demand of service tax a .....

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djudicated and the adjudicating authority confirmed the demand as proposed in the show cause notices of ₹ 3,14,42,183/- alongwith interest and also to impose penalty under section 77 and 78 of the Finance Act, 1994. The demand has also been confirmed under section 73 of the Finance Act, 1994. Aggrieved from the said order, the appellant is before us. 3. Learned Counsel appearing for the appellant submits that the impugned order is not sustainable on the following ground: (a) the adjudicati .....

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and not subsequently. As the cause of action arose at Chandigarh and there is no notification or change of jurisdiction, in that circumstance, the adjudicating authority has no jurisdiction to decide the issue, therefore, the impugned order is to be set aside. (b) He further submits that the appellant has constructed houses for CHB who in turn let out to slum dwellers on payment of monthly lease and houses were not sold by CHB but these were allotted on lease/licence basis. It is well settled la .....

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ging suppression of facts on the ground that the appellant has failed to get themselves registered and did not file returns. It is settled law that onus to prove that there is suppression of facts lies upon the Revenue. Mere non registration and consequently non filing of return cannot be called as suppression of facts. The Revenue has failed to discharge its burden. Further, the appellant has acted in a bonafide manner and there was a reason for not paying service tax. The appellant has sought .....

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of Suresh Kumar Bansal held that no service tax is payable on flats booked prior to construction. Further, the Hon ble Punjab & Haryana High Court in the case of Bharat Bhushan Gupta vs. State of Haryana-2016 (44) STR 195 (P&H) has held that no service tax is payable on construction for government authority. In that circumstance, the appellant was under bonafide belief that the unit constructed under Jawahar Lal Nehru National Urban Renewal Mission fall under the category of constructio .....

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crores, therefore, if at all liability arises, the appellant is required to pay service on ₹ 25 crore of which service tax worked out to ₹ 2.14 crores whereas the respondent has confirmed the demand of ₹ 3.14 crores. (e) He further submits that the respondent has confirmed the demand under section 73 of the Act or under section 73A of the Act. The demand raised in the show cause notice is more than double of the tax confirmed. The Revenue is considering the tax demanded under .....

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that the tax is not payable by the contractee. The Courts have further held that where contract is between only two parties, the department cannot retain any amount because it is purely commercial transaction between two parties. To support this, he relied on the decision of the Hon ble Patna High Court in the case of Shapoorji Paloonji vs. CCE-2016 (42) STR 681 (Patna). (f) He further submits that the contractee may retain amount if contract includes service tax and it is not payable as held b .....

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d at Bhatinda which fall under the jurisdiction of Commissioner of Central Excise, Chandigarh-II. The adjudicating authority is having jurisdiction over the appellant to adjudicate the above show cause notice. 5. Heard both sides and considered the submissions. 6. In this case, at the time of the execution of work, the appellant was not registered with the Central Excise/Service tax department. In that circumstance, the jurisdiction falls where the appellant has executed the work. Admittedly, in .....

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ayment of monthly lease and houses were not sold by CHB but these were allotted on lease/licence basis. In that circumstance, as the said housing units have not been sold by CHB, therefore, relying on the decision of Tribunal in the case of Khurana Engineering Ltd. vs. CCE- Ahmedabad-2011 (21) STR 115 (Tri.) wherein this Tribunal has observed as under:- 3. We also find alternative submissions made by the learned advocate are to be sustained. The first alternative submission made was that the sho .....

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ppellant in his submission, the agreement also provides that in case of liability of any tax, the service receiver is liable to pay. In these circumstances, the appellants had no reason to resort to suppression or mis-declaration of the facts to avoid payment of service tax since if the service tax was liable, as per the contract, CPWD was liable to pay service tax. Under these circumstances, invocation of extended time limit cannot be justified in this case. Therefore, penalties imposed under v .....

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otice proposed to demand under section 73 and section 73A of the Act. Admittedly, the respondent themselves are confused under which provisions, they want to demand service tax from the appellant as on the one hand, the demand has been raised under section 73 and on the other hand, the demand has also raised under section 73A of the Act. It shows that the respondent themselves are confused that how much amount has actually been collected by the appellant and retained. The provisions of section 7 .....

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tax as it would be a case of undue enrichment. We do not find any merit in this argument as well. The payment of service tax has not been made by the numerous consumers and collected by the petitioner. It is paid by the petitioner alone. The petitioner is entitled for the reimbursement of the amount of service tax by Respondent No. 4 in terms of the letter of award of contract. Such payment of service tax by the petitioner is not indirect collection of taxes but the direct payment by the petiti .....

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