TMI Blog2023 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 - demand occurred due to change in rate of duty - HELD THAT:- The service was provided by the Appellant prior to change in rate of duty and Invoices have also been raised prior to change in rate of duty. The recovery of the amount after the change in the rate of duty does not mean that the revised rate would be applicable for the services rendered prior to the rate change. This view has been held in the case of Commissioner of Service Tax Vs. Consulting Engineering Services (I) Pvt. Ltd [ 2013 (1) TMI 434 - DELHI HIGH COURT] - the demand confirmed by adopting the revised rate of duty is not sustainable. Non-payment of service tax during the period of FY 2007-08 for providing service as Subcontractor - HELD THAT:- The adjudicating authority has relied on the Board circular 96/7/2007-ST dated 23.08.2007 wherein it has been clarified that sub-contractor is also liable to pay service tax even if the main contractor pays service tax. It is observed that this clarification was issued on 23.08.2007. Thus, on merit the submission of the Appellant, cannot be agreed upon. However, it is observed that prior to this clarification, there were confusion about the liability of sub-contractor t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s below: Particulars Amount (in Rs.) Remarks Point of Consideration before Hon'ble CESTAT a. Failure to Pay Service Tax on receipt of Advance during the FY 2008-09 . 6,09,944.00 Paid vide GAR 7 challan No -50013 dated24.12.2019 Amount paid alongwith Interest amounting to Rs. 116658/- prior to issusance of SCN dated 19.04.2011, also considered in SCN. b. Failure to on receipt of Advance on15.11.2008 and on 15.03.2009 5,53,663.00 Adjusted thorugh CENVAT Credit Amount paid alongwith Interest amounting to Rs.65325/(Rs. 41303 + Rs. 24022)- prior to issusance of SCN dated 19.04.2011, also considered in SCN. c. Short payment of service tax in terms of Rule 6 of the Service Tax Rules, 1994 56,58,835.00 Amount paid thorugh various GAR 7 Challan Amount paid beofre issuance of SCN and the same has been considered in SCN d. Short payment of Service tax during the period of FY 2006-07 and 2007-08 28,99,880.00 Not Paid Service Provided prior to change in Rate of Duty and Invoices Raised prior to change in Rate of Duty. Hence there should be no Demand of Tax. e. Short payment of service tax during the period from 23.08.2006 to 27.03.2008 2,67,141.00 Paid amount Rs. 277621/- and Interest amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July 2007 to March 2008 and non-complying the Notification No 32/2007 dated 22.05.2007. They have intimated the department regarding payment of Service tax under composition scheme vide letters dated 08.10.2007 and 02.07.2008. But in the impugned SCN, it has been alleged that they have paid service tax under the composition scheme without exercising the option, which is factually not correct. The Appellant submits that the Ld. Commissioner while passing the OIO has rejected their intimation letter by stating that they failed to establish conclusively that options were exercised in terms of Rule (3) of the Works Contract (Composite Scheme for payment of Service Tax) Rule 2007 before payment of service tax on the bill values. In respect of the same, the Appellant submits that they have intimated the department regarding payment of service tax prior to the payment of service tax except in one case. In that case also they have intimated the same upon payment. Rule 3(1) of the scheme gives an option to the person liable to pay service tax to discharge their service tax liability in terms of the scheme by paying an amount equivalent to 2% of the gross amount charged for the works contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on this demand. Accordingly, we set aside the penalty imposed on these demands. 10. We observe that the demand mentioned at (d) in Para 2 supra has occurred due to change in rate of duty. We observe that the service was provided by the Appellant prior to change in rate of duty and Invoices have also been raised prior to change in rate of duty. The recovery of the amount after the change in the rate of duty does not mean that the revised rate would be applicable for the services rendered prior to the rate change. This view has been held in the case of Commissioner of Service Tax Vs. Consulting Engineering Services (I) Pvt. Ltd [2013 (30) STR 586 (Del), the relevant portion of the decision is reproduced below: 7. In the absence of any Rules, we will have to examine as to what is the taxable event. The taxable event as per the Finance Act, 1994 is the providing of the taxable service. In the present case, we find that not only were the services admittedly provided prior of 14-5-2003 but also the bills have been raised prior to 14-5-2003. The only thing that happened after 14-5-2003 was that the payments were received after that date. That, in our view would not change the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the main contractor. In this case we find that the main contractors Simplex Project Limited and Tata Projects Limited have paid service tax on the full value. Further, we find that the demand is hit by limitation. The demand in this case pertains to the period 2007-08 and the show cause notice was issued on 19.04.2011, beyond the normal period of limitation. The department has not brought in any evidence to substantiate the allegation of suppression. Thus, we observe that the demand is hit by limitation. Accordingly, we hold that the demand confirmed in the impugned order by invoking extended period is not sustainable. In view of the above discussion, we set aside the demand confirmed in the impugned order on this count along with interest and penalty. 14. Regarding the demand of Rs.6,18,915/- confirmed at (g) mentioned in Para 2 supra, we observe that the demand has arisen due to payment of service tax by the Appellant under composition scheme for the period of July 2007 to March 2008 and non-complying the Notification No. 32/2007 dated 22.05.2007. We observe that the Appellant has intimated the department regarding payment of Service tax under composition scheme vide letters dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be denied for procedural deficiency of delay in opting for Works Contract Service by a specific declaration under Rule 3. More so, when no format has been prescribed for making/exercising an option nor has it been specified as to whom the option must be addressed. We agree that the fact of paying Service Tax at the composition rate in the returns filed by them, is enough indication to show that they have opted for payment under the Works Contract Composition Scheme. Reliance is placed on the case of Bridge and Roof Company (supra), wherein it was held as under: - After hearing both sides, duly represented by Shri Bipin Garg, learned Advocate appearing for the appellant and Shri K.K. Jaiswal, learned AR appearing for the Revenue, we find that the Revenue's main objection is absence of option exercised by the appellant before they started paying duty under the works contract. However, we find that as the appellant applied for registration under works contract, the same amount would amount to exercise of option in the absence of any format laid in the said rule for exercising said option. Similarly, we find favour in the appellant's contention that the restriction under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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