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TMI Blog2024 (8) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax registration, contracts/agreement awarded by CPWD for providing services in or in relation to Common Wealth Games 2010, challans, ST-3 returns, Balance Sheets for the period 2005-06 to 2009-10. On investigation, it appeared that the appellant was not paying service tax on the activity of laying of cables/wires. It appeared that the appellant believed that their activity would be chargeable to VAT not Service Tax, and was paying VAT. The Department formed an opinion that the appellant is liable to pay Service Tax in terms of Circular No. 123/5/2010-TRU. On completion of investigations, SCN dated 13.04.2012 invoking extended period of limitation was issued to the appellant demanding Service Tax amounting to Rs.1,17,48,282/- under Section 73(1); interest under Section 75 and imposition of penalty under Section 76, 77 & 78 of the Finance Act, 1994. The matter was adjudicated by the Commissioner vide Order-in-Original dated 20.05.2013 confirming demand of Rs.1,17,48,282/- (appropriating Rs.2,45,406/- already paid) under Section 73(1); interest under Section 75; imposing penalty of Rs. 5,000/- under Section 77 and equivalent penalty of Rs. 1,17,48,282/- under Section 78 of the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6230062302 dated 04.05.2018. 3.1 He further contended that the activity carried on by the appellant would also be exempt vide Circular: 80/10/2004 S.T. dated 17.09.2004, which provides exemption to the similar kind of services provided to Government department/organisations and are not meant for commercial purposes. 3.2 Learned Chartered Accountant submitted that the appellant had provided the services of laying of cables of pipelines inclusive of material, whereas the demand raised against the appellant was under the category of Erection, Commissioning & installation, which is not maintainable. Further, he submitted that the work done by the appellant being composite in nature can be taxed under the category of Works Contract only. In support of his submission, he relied upon the following decisions:- * Real Value Promoters Pvt. Ltd. V/s Commissioner of GST & Central Excise, Chennai cited in 2018 (9) TMI 1149 - Tribunal Chennai * M/s Madhusudan Engg. Co. v/s Commissioner - I, Central Excise and Customs, Jaipur cited in 2020 (10) TMI 474 CESTAT NEW DELHI * M/s Shanti Construction co. v/s C.C.E. 7 S.T. Rajkot cited in 2023 (3) TMI 14-CESTAT AHMEDABAD * M/s SS Constructions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & ST, LTU Delhi - 2019 (11) TMI 1573-CESTAT Chandigarh. * M/s SRF Ltd. Vs. Commissioner, Central Excise & Service Tax, LTU, New Delhi-2021 (8) TMI 696-CESTAT New Delhi. 3.5 Learned Chartered Accountant further submitted that it is a well settled position from the provisions of Finance Act and judgment of various courts that in case there is no separate recovery of service tax, the amount realized by him is to be considered as inclusive of Service Tax. He further contended that there is no suppression and willful mis-statement with the intention to evade of payment of tax on the part of the appellant. The invocation of extended period in the present matter is not sustainable. In support of his submissions, the Learned Chartered Accountant relied upon the following case laws:- * Sant Roadlines Vs. Commissioner of C. Ex. & S.T., Panchkula-2020 (43) G.S.T.L. 206 (Tri.-Chan.) * Jaiprakash Industries Ltd. Vs. Commissioner of C. Ex., Chandigarh 2002 (146) E.L.T. 481 (S.C.) Consequently, Learned Chartered Accountant contended that as there is no suppression, fraud, willful mis-statement on the part of the appellant, the imposition of penalty is not maintainable. 3.6 Learned Charte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; and in absence of any evidence of providing services of the nature which are excluded from the scope of the said service, the demand of Service Tax as raised in the Show Cause Notice is liable to be confirmed against them. 4.2 Ld. AR further contended that the appellant never disclosed the facts to the Department regarding the taxable services provided by them since 2006 and willfully avoided discharge of their Service Tax liability till initiation of investigation with reference to services provided in or in relation to CWG-2010. Only after initiation of investigation they obtained Service Tax registration for providing 'Erection, Commissioning or Installation Services', defined under Section 65(39a) and taxable under Section 65(105) (zzd) the Finance Act, 1994 as amended and filed ST-3 return for the period Oct-Mar 2010-11 and discharged Service Tax liability against payments received including the payments received for providing taxable services in or in relation to CWG-2010 work from CPWD but failed to discharge entire Service Tax liability for the period from 2006-07 to 2010-11 on the ground that they had paid VAT on balance sheet figures which was found contrary w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Balance Sheet T/o figs = 1,49,52,641/ VAT paid value forged by Rs. 61,51,305/ Apr-Jun 2007 656879/dt 14.01.08 790608 656879/dt 14.01.08 32,25,643 24,35,035 8482 Jul-Sep 656880/dt 14.01.08 8,16,086 656880/dt 14.01.08 39,29,484 31,13,398 21251 Balance Sheet T/o= 19,27,6570/- VAT paid value forged by Rs. 55,48,433/ We find that despite forging an enhanced turnover for two quarters in the financial year 2006-07 and two subsequent quarters in the financial year 2007-08, the appellant has not paid higher VAT, in proportion to the enhanced VAT turnover. We note that one of the defences taken by the appellant is that they were under the bonafide belief that Service tax provisions were not applicable and that their activities are chargeable to VAT, which they were discharging at appropriate rates. We find that this argument falls flat in the face of such blatant tampering of the VAT returns, as indicated above. We also note that the appellant did not put forth any arguments regarding the allegation of forging of the Vat returns during the adjudication proceedings before the original authority. It is also a fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT returns for the years 2006-07 and 2007-08, we decline to examine any of his submissions pertaining to this period. 7. We note that the ld. Chartered Accountant has submitted that their service is not covered under Erection, Commissioning and Installation Service as the dominant nature of the contract is laying of cables or pipelines. We note that as per the letter dated 27.12.10 of Shri Vishnu Aggarwal, CA and authorised representative of the appellant, which stated that the appellant had received two work orders from PWD/CPWD which involved the following:- (i) LOA No. 54(11) EE(E)CW-114/PWD/2009-10/516 dt 25.11.2009 for supply, installation, testing and commissioning of ISDN EPABX system at Chhatrasal Stadium (ii) Worl of remodelling & upgradation of MDC National Stadium for CWG-2010. 7.1 We find that the issue involved in this case relates to non-payment of tax under the category, "Erection, Commissioning and Installation Services". At the outset, there is considerable merit in the contention of the Appellant that composite contracts involving supply of both goods and services could not have been taxed under the category, "Erection, Commissioning and Installation Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old that it would be appropriate to remand the case for recalculation of the demand by giving the benefit of abatement to the appellant. 7.3 We now come to the issue of invocation of extended period alleging suppression and fraud along with interest and penalty under section 78 of the Finance Act, 1994. In this context, we note that the there is evidence that the appellant had tampered with four of his VAT returns, in order to substantiate his claim that as VAT had been paid on the transactions, hence no service tax is leviable. This act of the appellant cannot be overlooked. This clearly indicates his intent to evade payment of duty, and satisfies the requirement for invocation of the extended period. Consequently, the penalty under Section 78 is also leviable. 7.4 The interest liability is upheld as it is a statutory. 8. In view of the above discussions, we partially allow the appeal, and also by way of remand for calculating the demand under Works Contract Service by extending the benefit of abatement under the relevant notification. We uphold the invocation of extended period and hold the appellant liable for penalty under Section 78, which will be based on the reworked quan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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