Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Ashok Jindal (Judicial Member) and Sanjiv Srivastava (Technical Member) allowed an appeal which was directed against the order-in-appeal which was again upheld by the Commissioner (Appeals).

The appellants were during the financial year 2004-05 providing taxable services namely:

  • Consulting Engineer Service under Section 65 (105)(g) of the Finance Act, 1994.
  • Erection, Commissioning & Installation under Section 65(105)(zzd) of the Act.
  • Maintenance & Repair under Section 65 (105)(zzg) of the Act.

As appellants had defaulted on payment of service tax due on these services, Revenue had issued show cause notice dated 28-03-2007 demanding service tax under certain category. By the said show cause notice, appellant were asked to show cause as to why:-

  1. an amount of Rs.13,22,959/- (Rs. Thirteen lakhs twenty two thousand nine hundred and fifty nine only) being the service tax (incl. Education cess) (as per Annexure “B”) payable under Section 68 of the Finance Act, 1994 on the amount of Rs. 1,29,70,186/- recovered by the assessee during the FY 2004-05 towards the business conducted with M/s Malabar Cements Ltd., should not be demanded and recovered from them;
  2. an amount of Rs. 2,12,691/- (Rs. Two lakhs twelve thousand six hundred and ninety one only) ( as per Annexure “B” towards wrong availment / utilisation of cenvat credit should not be demanded and recovered from them in terms of Rule 14, read with Rule 16, of the Cenvat Credit Rules, 2004 and Section 73 of the Finance Act, 1994;
  3. the provisions of extended period under Section 73 of the Act ibid should not be invoked;
  4. interest at the appropriate rate for the period by which payment of tax delayed should not be demanded from them under Section 75 of the Act ibid;
  5. a penalty should not be imposed under Section 76, 77, 78 for the acts and omissions as stated above.
  6. the amount of Rs. 4,89,955/- (ST of Rs. 3,68,547/- and interest of Rs. 1,21,408/-) deposited vide TR-6 dated 7.6.2007 as part payment made against the abovesaid service tax liability should not be appropriated and confirmed.

The Tribunal after hearing the parties was convinced of the fact that the services provided by the appellant were contract services as the invoices are supply of material alongwith services. The Tribunal further agreed that the issue was covered in the case relied on by the Counsel of the Appellant in CCE & Cus. v. Larsen & Toubro Ltd., 2015 (39) STR 913 (SC) relevant paras of which were:

“43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services.

  1. We have been informed by counsel for the revenue that several exemption notifications have been granted qua service tax “levied” by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since the levy itself of service tax has been found to be non-existent, no question of any exemption would arise. With these observations, these appeals are disposed of.
  2. We, therefore, allow all the appeals of the assessees before us and dismiss all the appeals of the revenue.”

The Tribunal following the above decision allowed the appeal and held that appellant was entitled to consequential benefits.[Enexco Teknologies (India) Ltd. v. Commr. ST, 2021 SCC OnLine CESTAT 2541 , decided on 27-08-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Must Watch

maintenance to second wife

bail in false pretext of marriage

right to procreate of convict

Criminology, Penology and Victimology book release

Join the discussion

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.