TMI Blog2021 (12) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest and if there is no invocation of a provision in the Show Cause Notice, it would not be open to the adjudicating authority to invoke the said provision later on. The learned Commissioner has erred in adjudicating the issues not raised in the SCN. Further it cannot be said, as contended by the learned Authorized Representative, that issue of non-fulfillment of the conditions of Notification No.32/2007 dated 22.05.2007 relating to Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 was consequential to the classification issue. The issue of non-fulfillment of the conditions of Notification No.32/2007 is a separate and distinct issue and there has to be a specific allegation regarding the same considering the facts and circumstances of a particular case. This has indisputably not been done in the instant case. Pipeline construction charges - HELD THAT:- The same had been reflected in the relevant service tax returns for FY 2007-08 under the category of Site Preparation Clearance Services . There cannot arise any question of further including the said amount and paying service tax of ₹ 53,06,663/- under the category of Commercial Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection in the impugned order for appropriation of ₹ 5,81,346/- already paid as interest and has sought refund of the said amounts. The impugned order has dropped the demand of CENVAT Credit of ₹ 87,07,072/- and the said issue has attained finality as the department has not filed any appeal against the said issue. 2. Briefly stated, the facts of the case are that the Appellant is a proprietary concern and is engaged in providing horizontal directional drilling (HDD) services enabling laying of cables and / or pipelines and works contract services for laying of pipelines/cables etc. During the Relevant Period the Appellant was registered with the Service Tax department under the category of Works Contract Services , Site Preparation and Clearance Services and Commercial or Industrial Construction Services vide service tax code No. AAVPB6401FST001. The main activity of the Appellant is to undertake turnkey contracts for laying pipelines/cables which include excavation, laying, construction, joining work. 3. Proceedings were initiated by the Department by issuing Show Cause Notice (SCN) dated 17.10.2012 wherein it was alleged that the Appellant s activities rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is demand under the category of Site Preparation Clearance Service. At paragraph 3.9 of the impugned order it has been specifically observed that As the work of the assessee is in conformity with the scope of Works Contract Services I find that the allegation of mis-classification doesn t survive . . The said findings have attained finality. However, the Commissioner acted beyond jurisdiction by failing to drop the related demand, travelling beyond the scope of SCN and holding that the Appellant had discharged its tax liability under the Works Contract Composite Scheme without exercising the appropriate option thereunder. It was submitted that it is settled law that the Show Cause Notice is the foundation of any proceeding. If there is no invocation of a provision in the Show Cause Notice, it would not be open to the adjudicating authority to invoke the said provision at a later stage. In this regard reliance was placed on the following decisions:- (a) Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd. Reported in 2007 (215) ELT 489 (SC); (b) Commissioner of Customs, Mumbai v. Toyo Engineering India Ltd. Reported in 2006 (201) ELT 513 (SC); (c) Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Learned Advocate for the Appellant that the adjudicating authority had completely overlooked that the pipeline construction charges for ₹ 4,29,34,169/-, on which the said appropriate tax was duly computed, had been reflected in the relevant service tax returns for FY 2007-08 under the category of Site Preparation Clearance Services . Service tax liability having already been determined and discharged on the said sum of ₹ 4,29,34,169/- at full rate, there cannot arise any question of further including the said amount and paying service tax of ₹ 53,06,663/- under the category of Commercial Industrial Construction service . 11. In relation to the demand of ₹ 43,355/- as service tax towards Supply of tangible Goods Service , the Appellant vehemently denied and disputed its liability. It was stated that the Appellant had never given its machinery on hire or for use to Customers / clients for FY 2008 - 09 and 2009 - 10, as alleged in the SCN or at all. The income aggregating to ₹ 4,14,000/-, on which the above service tax liability has been calculated, does not fall within the purview of Section 65(105)(zzzzj) of the Finance Act. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant had to bear the legal consequences which was to follow the procedure as stated in the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. It was submitted that to avail the said scheme, exercising option was mandatory. He relied upon decision of the Hon ble Andhra Pradesh High Court in the case of Nagarjuna Construction Co. vs. GOI reported in (2010) 19 STR 321 (AP). The said judgement was affirmed by the Hon ble Supreme Court reported in (2012) 28 STR 561 (SC). The learned Authorized Representative also disputed the non-availment of CENVAT on inputs by the Appellant. 14. On the second issue, the learned Authorized Representative submitted that Appellant has not effectively furnished its reply on the said issue. It was submitted that the calculation furnished by the appellant during the course of hearing was not before the Commissioner. On the third issue and on the issue of limitation, the learned Authorized Representative reiterated the findings made by the learned Commissioner and justified the impugned order. 15. Heard both sides through video conferencing and perused the appeal records. Written submissions filed by the parties hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice. 19. We find that learned Commissioner has erred in adjudicating the issues not raised in the SCN. Further it cannot be said, as contended by the learned Authorized Representative, that issue of non-fulfillment of the conditions of Notification No.32/2007 dated 22.05.2007 relating to Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 was consequential to the classification issue. The issue of non-fulfillment of the conditions of Notification No.32/2007 is a separate and distinct issue and there has to be a specific allegation regarding the same considering the facts and circumstances of a particular case. This has indisputably not been done in the instant case. 20. The reliance placed by the learned Authorized Representative for the Revenue upon decision of the Hon ble Andhra Pradesh High Court in the case of Nagarjuna Construction Co (Supra) is also misconceived. In that case the issue was whether the petitioner therein, in relation to the ongoing works being executed and in respect of which it had paid service tax prior to 01-06-2007, could claim benefits under the composition scheme. It was in that context that the Hon ble High court and Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category of Commercial Industrial Construction Service . The said position is borne out from the documents annexed in the appeal paper book and is further supported by the CA certificate. Hence, we hold that the demand of ₹ 53,06,663/- in relation to pipeline construction charges cannot be sustained and is set aside. 23. On the third issue relating to the demand of ₹ 43,355/- as service tax towards Supply of Tangible Goods Service , we find that the department has adduced no evidence to show how the subject service falls under the head Supply of Tangible Goods Service within the meaning of Section 65 (105) (zzzzj) of the Finance Act. The said demand is based on presumptions and assumptions and is unsustainable in law and hence set aside. 24. On the issue of limitation, we find that the impugned issues relate to pure questions of law and classification. The learned Commissioner has also held in favour of the Appellant on the said classification issue and also on another issue relating to CENVAT credit. The SCN raised legal issues based upon comparison of documents such as the appellant s work orders, contracts, audited financial statements, service tax return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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