TMI Blog2022 (8) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon loses its evidentiary value in absence of any independent inquiry which was mandatorily required to have been conducted by concerned officers of Central Excise department at Bhavnagar, before issuance of the Show Cause Notice dated 21-09-2020 - In this case, provisions of Section 36A and Section 36B does not appear satisfied as conditions imposed does not appear followed by Central Excise department. Hence, shared data by Income Tax department cannot be used against Appellant without independent inquiry/investigation carried by the Revenue. Therefore, demand of Service Tax confirmed with interest and Penalty by the adjudicating authority also deserves to be set aside on this ground. The provisions of Section 65A of Finance Act 1994 provides for classification of taxable services. It is settled law that activity shall be classified of a service which gives a service essential character, as per section 65A ibid as it is applicable. The activity of maintenance, repairs are distinct and separate taxable services listed under Sr. No. 12 of Notification No. 25/2012-ST. Hence, O-I-O is not in accordance with provisions of Finance Act 1994. Sr. No 12 of Notification 25/2012-S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2014-15 to 2017-18 [upto 30-06-2017]. 2. Brief facts of case are that M/s Krishna Construction Co, Bhavnagar is Appellant, holder of Income Tax PAN- AACFK2418A, engaged in Commercial or Industrial construction and provided services to Railways. Income Tax authorities shared data of the Income shown by Appellant in Income Tax Returns filed from time to time. Perusing said data shared by Income Tax authorities, Central Excise officers at Bhavnagar noticed that Appellant had not paid Service Tax of Rs.3,61,66,662/- from the years FY 2014-15 to 2017-18 [upto 30-06-2017]. Superintendent of Central Excise, Bhavnagar requested Appellant to provide details of Income receipts and to submit documents related to Service Tax paid, which was not responded by Appellant. Therefore, Show Cause Notice No. V/15-36/DEM/HQ/2020-21 dated 21-09-2020 demanding total Service Tax of Rs.3,61,66,662/- was issued. Appellant participated in adjudication proceedings, submitted documents and objected total demand of Service Tax. However, impugned Order-in-Original No. BVR-EXCUS-000-COMM-14-2021-22 dated 02-03-2022 confirmed demand of Rs. 1,59,56,741/- with interest and imposed penalties and also dropped t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCE Jaipur-I Vs. Tahal Consulting Engineers Ltd. 2016(44) S.T.R. 671 (Tri. Del) CESTAT Order No. A/10270-10275 / 2022 dated 17-03-2022 in Service Tax Appeal No. 10599 of 2021-DB filed by Appellant M/s J.P. ISCON PVT LTD CESTAT Order No. A/ 10804 /2022 dated 15-07-2022 in Service Tax Appeal No. 10027 of 2020 filed by Appellant M/s SHRESTH LEASING FINANCE LTD CESTAT Order in FORWARD RESOURCES PVT LTD CESTAT Order in VATSAL RESOURCES PVT LTD 3.3 Without prejudice to the above submissions, he submits that the Order is beyond scope of SCN. Demand of Service Tax confirmed is under specific activity heads in Order dated 02-03-2022, which are neither specifically mentioned nor proposed in Show Cause Notice dt. 21-09-2020. It is settled that Show Cause Notice is foundation of any case by Revenue and adjudication order beyond such SCN cannot be sustained, which is the settled law by plethora of decisions. 3.4 He also submits that O-I-O dated 02-03-2022 has not correctly appreciated fact that Appellant has provided services only to Government (Indian Railways), which have exemption under Notification No. 25/2012-ST dt. 20-12-2012. Appellant submit that adjudicating aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns to evade payment of Service Tax, which is not brought on record through any clinching positive evidences. 4. On the other hand appearing on behalf of the Revenue, Shri Dharmendra Kanjani, Superintendent (Authorised Representative) reiterates finding of impugned Order and submits that although, SCN dt. 21-09-2020 was issued only on the basis of data shared by Income Tax Authorities, but, it is not correct to say that confirmation of demand by adjudicating authority is only on the basis of said shared data. Appellant have also filed their own documents related to services provided by them during adjudication proceedings of SCN and hence adjudicating authority has rightly passed this Order-in-Original. He submits that the classification of service is not relevant after 01.07.2012. He submits that activities for which demand is confirmed by adjudicating authority are not covered under the exemption Notification No. 25/2012-ST. He submits supply of manpower for cleaning Railway station and manage unmanned Railway crossing by Gate Mitra was only cleaning service and supply of manpower service, which are not eligible for exemption under Notification No. 25/2012-ST. He also Submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 1,59,56,741 Total Service Tax confirmed Rs. 1,59,56,741 The impugned O-I-O dated 02-03-2022 has confirmed the demand only on the finding that the above services were not related to the Original works as referred to in Notification No. 25/2012-ST, considering availability of such exemption under Sr No. 14 of the said Notification No. 25/2012-ST. Therefore, we examine the submissions raised on behalf of the Appellant in this regard one by one as under :- 5.2 On behalf of Appellant it is submitted that without conducting any independent inquiry or investigation, demand of Service Tax is not sustainable only on the basis of document or information or data provided by Income Tax authorities to Central Excise Officers. Service Tax demand cannot be raised on the basis of assessment by Income Tax Authorities. We find that there is no dispute on fact that in this case Show Cause Notice proposing demand of Service Tax, Revenue has solely relied upon Data/TDS/26AS declared by Appellant in their Income Tax Returns for the FY 2014-15 to 2016-17, which are shared by Income Tax authorities. Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that demand of Services Tax on the basis of TDS /26AS statements/ 3CD Statements are not sustainable. Such a similar view is also taken by this Tribunal at Ahmedabad vide the following decisions :- Order No. A/10270-10275/2022 dt. 17-03-2022 in Appeal No. ST/10599/2021-DB filed by M/s J.P. ISCON PVT LTD Order No. A/10804/2022 dated 15-07-2022 in Service Tax Appeal No. ST/10027/2020 filed by M/s SHRESTH LEASING FINANCE LTD. Similar view is taken in Order dated 15-07-2022 in case of M/s Forward Resources Pvt Ltd, Order dated 15-07-2022 in case of M/s Reynolds Petro Chem Ltd, and Order dated 15-07-2022 in case of M/s Vatsal Resources Pvt Ltd, In the above decisions, it is consistent view that demand of Services Tax on the basis of shared data of TDS/26AS/3CD Statements are not sustainable. We note that it is settled that Service Tax demand cannot be raised only on the basis of any such assessment made by the Income Tax Authorities. Information or data or documents relied upon loses its evidentiary value in absence of any independent inquiry which was mandatorily required to have been conducted by concerned officers of Central Excise department at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 66D, not attracting Service Tax and there are Services which were allowed Exemptions from Service Tax under Notification No. 25/2012-ST and many such other Notifications issued. Therefore, the very foundation of allegation in SCN has to be with reference to specific categories or classification of alleged Service(s) for demanding Service Tax on the Taxable value determined under the Finance Act, 1994. It is impermissible under law to issue any baseless SCN on assumption or presumptions and later on in adjudication the allegation can be improvised. In facts of this case, when Appellant did not respond to communication issued by Superintendent of Central Excise, the law has provided unlimited powers to Central Excise officers to search premises of Appellant and seized documents and collect evidences before issue of SCN to frame appropriate charges against the Appellant and conduct appropriate inquiry on evasion of Service Tax by the Appellant. In this case, the department has chosen not to exercise such unlimited powers to establish case of evasion of Service Tax. It was necessary for the Department to specify the activity and the nature of service that was to be taxed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tailed clarification for the said services in Appeal and submitted that they are eligible for exemption under Sr. No. 12 of the said Exemption Notification No. 25/2012-ST. Therefore the relevant Sr. No. 12 of the said Notification No. 25/2012-ST dated 20-6-2012, which has provided such exemption has been reproduced as under :- 12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; 5.5 Now, we examine the activities on which Service Tax has been confirmed by adjudicating authority vis- -vis availability of exemption :- (i) W R Contract income :- The adjudicating authority has confirmed Service Tax demand of Rs. 4,02,217/- @ 15 % on the total amount of Rs. 26,94,777/-, shown as Gate Mitra Income in Profit Loss account against Western Railway Contract Income for the year 2016-17. Adjudicating authority has noted that scope of work done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rack and to perform normal routine maintenance work on existing rails/tracks viz removing, fastening, lubrication of ERC, Cleaning of grass, over hauling of LCs, carting of rails. Adjudicating Authority has denied exemption as it is not related to Original work of construction, erection, commissioning, or installation pertaining to the Railways. Appellant has submitted that they are eligible for exemption under the Sr. No. 12 of the said Notification No. 25/2012-ST which provided such exemption for such Maintenance. We find this activity is services of Maintenance of the Railway Tracks, beyond doubt. Therefore, activity by Appellant is maintenance of railway tracks, which is covered under the ambit of Maintenance of Railway tracks. Therefore, Service Tax could not have been confirmed as this service is Maintenance of Railway Tracks only and it is undoubtedly exempted under the serial No. 12 of the Notification NO.25/2012-ST dated 20/06/2012. (iii) Cleaning of Station :- The adjudicating authority has confirmed Service Tax of Rs. 30,530/- @ 12.36 % on amount of Rs. 2,47,171/-, which is shown as Cleaning of Station Income in Profit Loss accounts for FY 2014-15, carried o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flash butt welding, programmed welding sequence for welding of the rail joints during the F.Y. 2014-15 and the total amount of Rs.17,89,512/- has been received for it which is shown as WR Grinding FB is welding . There is no detailed discussion in O-I-O regarding nature of process undertaken and nature of welding carried out on Rails/Railway Tracks. This Activity in our view is only Repairs Maintenance. The work was carried out as per Tender floated on 25-04-2012 and it has to be treated as Repair and Maintenance of Railway Track only. Therefore, such Grinding Flash Butt (Electric Resistance) Welding activity on the Rail Tracks of Western Railway under which Appellant have carried out work during F.Y. 2014-15 is nothing but Repairs and Maintenance of Railway Tracks. Thus, contract was for work for maintenance, repairs, which is exempted under Sr No. 12 of Notification No. 25/2012-ST from payment of Service Tax on value of amount paid by Railways to Appellant. Adjudicating Authority has denied exemption which is available under sr. No. 12 of Notification No. 25/2012-ST. Accordingly, Service Tax demand of Rs. 2,21,184/- on the amount of Rs. 17,89,512/-, deserves to be set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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