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TMI Blog2024 (4) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... al". 2. During the material period the Appellant was, inter -alia, engaged in the following major activities: (a) Supply and fixing of aluminium glazed doors and windows in the residential as well as commercial buildings, (b) Supply and fixing of Spider Fit glass skylights at Atrium using glass as per requirement of the clients, (c) Complete supply, installation, testing, commissioning of Glass Façade in the commercial buildings 3. The taxable services provided/received by the Appellant during the material period comprised of the following: (a) Commercial or Industrial Construction Service; (b) Construction of Complex Service; (c) Works Contract Service; (d) Transport of Goods by Road Service; (e) Erection, Commissioning and Installation Service 4. During the material period, while discharging service tax liability in respect of Commercial or Industrial Construction Service and Construction of Complex Service, the Appellant paid service tax only for the contracts entered into and executed prior to 01.06.2007 at the full rate after availing the abatement under Notification No. 1/2006 - ST dated 01.03.2006. For the contracts entered into and executed after 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 to March 2011 3,791,781/- Option not opted by intimating Department. 6. Disallowance of CENVAT Credit 2009-10 to 2012-13 5,658,476/- Non-submission of underlying taxpaying documents. Total Demand 24,754,070/- 7. Regarding the demand of service tax of Rs. 1,19,97,075/- (including Cess) confirmed under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, the Appellant submits that during the half year ended 31.03.2009 on 24.04.2009, they have submitted service tax return under construction service wherein service tax liability was discharged @ 2% on some portion of the taxable value and @ 4% on remaining portion of the taxable value and shown accordingly in the original return submitted. On 21.07.2009 they have submitted revised return stating that 'Construction Service' was wrongly shown in the original return and the same has been corrected as 'Works Contract Service' in the revised return. However, it was alleged in the impugned SCN that the Appellant has submitted the revised return wilfully mis-declaring th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Commissioner of Central Excise, Jaipur [2016 (44) S.T.R. 651 (Tri. - Del.)] wherein it was clearly laid down that "the option to be exercised is not required to be exercised in writing and the very fact of payment of duty under the composition scheme reflects upon the option of the assessee." Accordingly, the appellant submits that the demand confirmed on this ground is not sustainable. 7.1 Regarding the demand of service tax of Rs.12,61,280/- under service head of GTA, the Appellant submits that at the time of audit, they produced voluminous bills/ vouchers which were accounted for in the 'Transportation' ledger for the financial years 2008 - 09 to 2012 - 13 . The concerned audit officers have not verified the documents and obtained the gross amount shown in the Profit & Loss A/c for the respective financial years under the head 'Transportation' and demanded service tax under the head 'Transportation of Goods by Road' service. The appellant produced a Chartered Accountant Certificate and on the basis of the said certificate they submit that during the financial years 2008 - 09 to 2012 - 13, they have incurred expenditure of Rs. 1,90,07,981/- under 'Loading, unloading and local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionately at the end of the year instead of on monthly basis which was rectified by the Appellant inasmuch as the said credit was reversed along with interest. For the subsequent period i.e, for FY 2010-11 credit was reversed proportionately on monthly basis and also paid the short reversal along with interest. The Appellant submits that the main objective of the Rule 6(1) is to ensure that the assessee should not avail the CENVAT Credit in respect of input or input services which are used in or in relation to provision of exempted services. If this is the objective then at the most amount which is to be recovered shall not be in any case more than CENVAT Credit attributed to the input or input services used in the provision of exempted services and it is even more illogical to imagine a demand exceeding beyond the total common CENVAT Credit availed by the Appellant for service provider of taxable/exempted service. Further, the demand in any case cannot go beyond the total common CENVAT Credit availed by the Appellant. Reliance in this regard is placed on the decision of Gujarat High Court in the case of Commissioner of Central Excise, Ahmedabad-II v. Maize Products [2009 (234) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 - 10 to 2012 - 13. All invoices were produced for verification before the concerned audit officer but invoices were not checked by the audit team on the pretext that the documents are voluminous and will take lot of time and they have to conclude the audit within three days. To cut short the exercise, the entire Cenvat credit availed and utilised by the Appellant during the period 2009 - 10 to 2012 - 13 has been alleged as irregular. Accordingly, they submit that the demand confirmed on this count in the impugned order is to sustainable. 7.7. The Appellant further submits that the impugned SCN covering the demands for the period from October 2008 to March 2009 was issued on 21.04.2014, by invoking the extended period of limitation under the proviso to Section 73(1) of the Act, which is not at all sustainable. Proviso to Section 73(1) of the Act can be invoked only in situations, where any service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion, wilful misstatement, suppression of facts or contravention of any of the provisions of the Act or of the rules made thereunder, with an intention to evade pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the ratio of the decision of the Tribunal cited above, we hold that that the appellant is eligible for availment of Composition Scheme for payment of service tax and hence the demand confirmed in the impugned order by denying the benefit is not sustainable. Accordingly, we set aside the demand of Rs. 1,19,97,075/- (including Cess) confirmed under Works Contract Service, in the impugned order. 10.2. Regarding the demand of service tax of Rs.12,61,280/- under service head of GTA, the Appellant submits that at the time of audit, they produced voluminous bills/ vouchers which were accounted for in the 'Transportation' ledger for the financial years 2008 - 09 to 2012 - 13 . The concerned audit officers have not verified the documents and obtained the gross amount shown in the Profit & Loss A/c for the respective financial years under the head 'Transportation' and demanded service tax under the head 'Transportation of Goods by Road' service. We observe that the demand has been mechanically confirmed without verifying the documents submitted the appellant. The documents submitted by the appellant needs to be verified. The demand confirmed without verifying the documents is not sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as seen expressly stated is nothing but a procedure contemplated for application of Rule 6(3). Therefore, the argument of the Revenue that the requirement to intimate the department about the option exercised, is mandatory and that on failure, the appellant has no other option but to accept and comply Rule 6(3)(i) and make payment of 5%/ 10% of sale price of exempted goods / value of exempted services is not acceptable or convincing. The Rule does not lay down any such restriction. The procedure and conditions laid in Rule 6(3A) is intended to make Rule 6(3) workable and not to take away the option available to the assessee. In any case, at no stretch of imagination can it be said that on failure to intimate the department, Rule 6(3)(i) would automatically come into application." Following the decision of the Tribunal cited above, we set aside the demand of reversal of CENVAT credit of Rs.37,91,781/- in the impugned order. 10.4. Regarding the demand of Service Tax of Rs. 19,32,135/- (including Cess) and Rs.1,13,323/- confirmed in respect of works Contract executed on or after 01.07.2012 under 'other works contract', we observe that the contracts executed by the Appellant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompletion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property, service tax shall be payable on sixty per cent of the total amount charged for the works contract. Explanation 1.- For the purposes of this rule,- (a) "original works" means- (i) All new constructions; (ii) All types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (iii) Erection, commissioning or installation of plant, machinery or equipment or structures, whether prefabricated or otherwise". 10.5. During the course of hearing, the appellant submitted photos of the buildings where they have undertaken the said cladding work. We observe that the activity of the Appellant is simultaneous to the construction of the building and does not commence after construction of the building is completed. It is a part of the construction work. The building will not come into existence if the outer wall is not constructed. Thus, we observe that where the outer wall comprises of the glazing alone, the glazing work is not a completion or finishing work. A perusal of the photos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat credit after giving an opportunity to the appellant to explain their case. The appellant should also cooperate with the department and furnish all the documents for verification. 11. The Appellant submits that there is no suppression of facts involved in the in the instant case as the matter involves interpretation of statutory provisions and that they had acted on a bona fide belief that they would be eligible to avail the benefit of the Notification No. 1/2006 dated 01.03.2006. It is a settled position of law that when the matter involves interpretation of statutory provisions and the assessee acted on a bona fide belief, extended period of limitation cannot be invoked. We observe that there is no evidence available on record to invoke the extended period of limitation. Accordingly, we hold that the demand is not sustainable on the ground of limitation also. For the same reason, no penalty imposable on the appellant. 12. In view of the above discussion, we pass the following order: (i) The demand of Rs. 1,19,97,075/- (including Cess) confirmed under Works Contract Service, in the impugned order is set aside. (ii) The demand of service tax of Rs.12,61,280/- under ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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