M/s. Southern Wind Farm Ltd. Versus Commissioner of GST & Central Excise Chennai South
Service Tax
2019 (2) TMI 1309 – CESTAT CHENNAI – 2019 (25) G. S. T. L. 36 (Tri. – Chennai)
CESTAT CHENNAI – AT
Dated:- 19-2-2019
ST/Misc. /41502/2017 in ST/31/2011 – Final Order No. 40321/2019
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri V.S. Manoj, Advocate for the Appellant
Shri B. Balamurugan, AC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are manufacturers of wind operated electricity generator having factory at Puducherry. Based on intelligence that appellant was engaging transporters for transporting their goods and had also engaged consultants for their Wind Energy Division and had not registered themselves for the purpose of payment of service tax under GTA service or Consulting Engineering Service, the officers of DGCEI collected details under summons proceedings. It
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8,23,27/- for the period May 2006 to December 2006. NEPC had also entered into agreement with M/s. Norwin A/S Denmark for providing various services in respect of manufacture, erection and commissioning of machineries for generating wind power. In view of Slump Sale Agreement, all the assets and liabilities had been transferred as ongoing concern to the appellant. Hence the appellant had paid Rs. 5,82,928/- to Norwin A/S Wind Turbine Technologies towards advance for consulting engineering services. The service tax on such consideration has not been paid by the appellant. Since the appellant had not discharged service tax fully, show cause notice was issued proposing to demand service tax of Rs. 10,02,786/- along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed equal penalty under section78 of the Finance Act, 1994 apart from Rs. 1,000/- penalty under section 77 of the Act. The appellant filed appe
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on the appellant. That therefore on merits the appellant is not liable to discharge the service tax liability.
3. The ld. counsel also argued on the ground of limitation. The period involved is from January 2006 to February 2007 and the show cause notice has been issued on 12.5.2008. He argued that the Slump Sale Agreement is dated 16.1.2006 wherein the assumed liabilities indicate that the appellant has to pay the creditors. Nothing is said in the agreement that the appellant has to discharge service tax liabilities attached to such payments. When the department had made inquiries with regard to the liability for service tax, the appellant vide letter dated 31.1.2007, 28.3.2007, 2.4.2007 and 24.4.2007 had furnished all details. In the letter dated 28.3.2007, the appellant had specifically stated that all the payments made by the appellant pertain to the liability accrued to NEPC and the appellant has discharged such payment only as per the Slump Sale Agreement. It is submitted by him
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t the appellant had furnished details only after the inquiries made by the department. But for the interference by DGCEI, the evasion would not have come to light and therefore the show cause notice issue invoking the extended period is sustainable.
6. Heard both sides.
7. The main contention put forward by the appellant is that as per Slump Sale Agreement, they have taken up only the 'assumed liabilities' as contemplated in the agreement. The assumed liabilities include payment of freight charges as well as consulting engineering charges. It is contended by the appellant that there was no stipulation to pay up the service tax in connection with these payments and therefore they are not liable to pay the service tax. We are not impressed by this contention raised by the appellant. When the appellant has taken up the business of NEPC, which includes assets as well as liabilities, they have to establish with concrete evidence that the liability to discharge service tax is retained by N
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