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M/s Truworth Impex Pvt. Ltd. Versus CCE, Jaipur-I

2018 (1) TMI 216 - CESTAT NEW DELHI

Classification of services - renovation, restoration, maintenance work with reference to various buildings like hotels, hospitals etc - Revenue contended that the services rendered by the appellant are liable to be taxed under the category of construction service during the period 10/09/2004 to 15/06/2005 and repair and maintenance of immovable property service for the period 16/06/2005 to 25/07/2007 - appellants claimed that the services provided by them are essentially restoration and renovati .....

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of Section 65 (3a) of the Finance Act, 1994 is “repair, alteration or restoration of, or similar services in relation to building or civil structure”. - Regarding change of classification w.e.f. 16/06/2005, the Original Authority recorded that in most of the contracts, the appellant used the term maintenance and even if they have sometimes used the term “restorations” it is more akin to maintenance as the services were of continuous nature for maintaining properly in the hotel premises. It .....

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be considered that they have not availed such credit to attract the rigorous of Rule 6 (3) of Cenvat Credit Rules - the demand for the said amount for violation of Rule 6 (3) is not sustainable - penalty relevant to the said dispute is also liable to be set aside. - Extended period of limitation - Held that: - the appellants were engaged in providing such taxable service to various corporate entities in a large scale operation. In this connection, we have perused the findings of the impugned .....

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al is against order dated 09/12/2011 of Commissioner of Central Excise, Jaipur - I. The impugned order confirmed a service tax liability of ₹ 47,07,178/- on the appellant and also ordered recovery of ₹ 10,46,777/- in terms of Rule 14 of Cenvat Credit Rules, 2004. Penalties equivalent to the said amounts were also imposed under Section 78 readwith Rule 15 (4) of Cenvat Credit Rules, 2004. Further, penalty was imposed under Section 76 of the Finance Act, 1994. 2. The brief facts of the .....

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were initiated against them to demand and recover service tax and to impose penalties. The impugned order decided the dispute. The appellants claimed that the services provided by them are essentially restoration and renovation of immovable property and accordingly they are eligible to avail abatement of 67% in the taxable value. The Revenue contended that the services rendered by the appellant are liable to be taxed under the category of construction service during the period 10/09/2004 to 15/0 .....

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s :- (a) the show cause notice was very vague. The services rendered by the appellants were not categorically identified for a particular tax entry to levy service tax. In fact, the Original Authority himself noted that the show cause notice proposed to cover the services under category of commercial or industrial construction service (or) under maintenance or repair service. The Revenue itself is not clear about the correct classification of service ; (b) the services provided by the appellant .....

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commercial or industrial construction service ; (c) the Commissioner erred in classifying the service under maintenance or repair/management, maintenance or repair service for the period 16/06/2005 to 25/07/2007. The same service was classified by him as construction service for the period 10/09/2004 to 15/06/2005. The appellants provided the same type of service all through out ; (d) as per common understanding of the term restoration , the said process is for bringing back to a former state or .....

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as they are involved in completion of finishing services, repair, alteration, renovation or restoration all are similar services in relation to construction of civil structure or residential complex ; (g) the demand is contested on the question of limitation also. There is no suppression of fact with intend to evade payment of service tax. The issue involved is one of interpretation and correct classification of services rendered by the appellant. Relying on various case laws it is submitted tha .....

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provisions of Rule 6 (3) will not apply to the present case. The demand of ₹ 8,35,048/- on this account is not sustainable. (i) the penalties imposed on the appellant were also contested on the ground that the whole issue is with reference to interpretation of legal provisions and accordingly there can be no justifiable reason for imposing penalties. 4. The learned AR contested the submissions of the appellant. He reiterated that the Original Authority examined elaborately the various cont .....

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itself. There is no merit in the present appeal on the question of classification of service as ordered by the Original Authority. 5. We have heard the learned AR and perused the appeal record. The main dispute in the present appeal is with reference to the correct taxable category of services provided by the appellant. The appellants have provided a variety of service which are essentially with reference to restoration of bathrooms, swimming pools, floors, maintenance of marble floors, granite, .....

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ices in terms of Section 65 (3a) of the Finance Act, 1994 is repair, alteration or restoration of, or similar services in relation to building or civil structure . 6. Management, maintenance or repair service in introduced w.e.f. 16/06/2005 in terms of Section 65 (64) dealt with among other things maintenance or management of immovable property and w.e.f. 01/05/2006 maintenance or repair of properties whether immovable or not; the findings of the Original Authority on classification of the servi .....

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and Rinsing by using cleaner; (ix) Roof Heat Insulation Coating Works and (x) Restoration provided by the notices were classified under clause (b) of the Construction Services . Since Maintenance or Repair Service / Management, Maintenance or Repair Service was not in existing during the period, the only question to be decided is whether the services were covered under the category of Construction Service . The notices have argued that during this period, these services were covered under the ca .....

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uch services, hence I find that the service provider was eligible to avail abatement of 67% under the Notification No. 15/2004-ST dated 10.09.2004 in respect of the services provided during this period. Further, I find that in their reply the notices had already admitted non-payment and replied that they had deposited the Service Tax along with interest for the demand raised for this period (hence not produced proof of payment thereof). As such, the notices had contravened the provisions of Sect .....

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+ Education Cess ₹ 3,337/-) is not sustainable. 40. Having determined the classification of the services rendered by the notices during the period from 10.09.2004 to 15.06.2005, now I take up the classification of the services provided by the notices during the period from 16.06.2005 to 25.07.2007. On the examination of the above invoices and contracts / work orders, I further find that during this period, the services provided by the notices related to (i) Maintenance of various areas of .....

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of sealant; (iv) Honing by diamond pads; (v) Epoxy Coating and / or Biosan Wall Covering; (vi) Application of Paints on Constructed Areas; (vii) Bactericidal Coatings of Walls & Sealing; (viii) Anti Skid Treatment; (ix) Deep Scrubbing and Rinsing by using cleaner; (x) Roof Heat Insulation Coating Works and (xi) Restoration. Their services were most appropriately classified under the ambit of new service, namely Maintenance or Repair Service / Management, Maintenance or Repair Service as the .....

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ing and / or Biosan Wall Covering; (v) Application of Paints on Constructed Areas; (vi) Bactericidal Coatings of Walls & Sealing; (vii) Anti Skid Treatment; (viii) Deep Scrubbing and Rinsing by using cleaner; (ix) Roof Heat Insulation Coating Works and (x) Restoration, the notices had also been raising Incoices / Bills on work to work basis / running bills as per mutual agreements or contracts with their customers. I find that the notices were engaged in providing these services in relation .....

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of sealant, Epoxy Coating and / or Biosan Wall Covering, Application of Paints on Constructed Areas, Bactericidal Coatings of Walls & Sealing, Anti Skid Treatment, Deep Scrubbing and Rinsing by using cleaner, Roof Heat Insulation Coating Works and Restoration clearly indicate that they were provided for maintenance of buildings properties because from these activities no new construction emerged but these are required to keep the hotel properties or other business properties in a good condi .....

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dental or ancillary to such maintenance work hence the services provided by the noticees were covered under the purview of Maintenance or Repair Service / Management, Maintenance or Repair Service . In this case, the above services provided by the notices fulfilled both the parameters prescribed under the category of Maintenance or Repair Service / Management, Maintenance or Repair Services , i.e., (i) the services were provided under a contract or an agreement and (ii) the services were provide .....

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cally classifiable under the category of maintenance or repair service/management, maintenance or repair service in view of the specific description of the tax entry. Regarding change of classification w.e.f. 16/06/2005, the Original Authority recorded that in most of the contracts, the appellant used the term maintenance and even if they have sometimes used the term restorations it is more akin to maintenance as the services were of continuous nature for maintaining properly in the hotel premis .....

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been duly addressed by the Original Authority. There is no substantial or crucial aspect which was left un-addressed. On careful consideration of the above findings of the Original Authority, we are of the considered opinion that there is no factual or legal basis to interfere with the said findings. 9. The appellants contested the impugned order with reference to payment of 6% / 8% on the value of exempted services in terms of Rule 6 (3) (i) of the Cenvat Credit Rules, 2004. We note that the ap .....

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