CGST-Delhi III Versus Lattice Interiors (Vice-Versa)
Service Tax
2019 (2) TMI 1308 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 15-2-2019
Appeal No. ST/50016 & 50199/2016-DB – Final Order No. 50279-50280/2019
Service Tax
Justice Mr. Dilip Gupta, President And Mr. V. Padmanabhan, Member (Technical)
Sh. Vivek Pandey, DR & Ms. Vibha Narang, Advocate for the appellant
Ms. Vibha Narang, Advocate & Sh. Vivek Pandey, DR for the Respondent
ORDER
Per: V. Padmanabhan
1. These two appeals are against the order-in-original number 32/2015 dated 25/08/2015. M/s Lattice Interiors (M/s Lattice) were registered with Service Tax Department w.e.f. 2/05/2008 for providing commercial or industrial construction service. The Department received intelligence that M/s Lattice was not discharging service tax in full for these activities carried out by them. Investigation was undertaken into the activities in pursuance of the said intelligence. The various summons issued by th
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Lattice submitted details of various contracts executed by them. It was claimed that most of the contracts were for non-commercial buildings and provided to agencies such as Indian Railways, NTPC, Prasar Bharti etc. It was claimed that since the services were mostly provided for non-commercial purposes, the demand for service tax was not justified.
3. The adjudicating authority examined the various contracts, copies of which were submitted by M/s Lattice. He dropped Service Tax demand on services provided to Prasar Bharti, New Delhi Municipal Corporation, NTPC, Indian Railways, Power Machines (India) Ltd, NBCC Ltd which were not meant for commercial use. In respect of certain construction undertaken by way of residential units meant for use of the employees, also the demand for service tax was dropped. However, he held that the services rendered to Joint Stock Company, FEAT as well as Indian Oil Corporation were liable to service tax.
4. The adjudicating authority further observed th
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s challenged the portion of the order in which service tax amounting to Rs. 3.9 Lakhs stands confirmed. Both the appeals are taken together for decision in this common order.
6. Heard Shri Vivek Pandey, Ld. DR for the Revenue, who argued the grounds raised by Revenue. His submissions are summarized below:-
a. The Ld. DR submitted that the adjudicating authority has set aside the demand by taking the view that demand raised in the show cause notice was for the period beyond five years. He referred to the provisions of the Section 73 of the Act and submitted that the “relevant date” is to be considered as the last day on which ST-3 Returns was required to be filed i.e. for the period from 01/04/2008 to 30/09/2008, the last date was 25/10/2008. Considering this as the relevant date, he submitted that the show cause notice dated 23/10/2013 covers the period of demand right from 01/04/2008.
b. He submitted that the adjudicating authority has wrongly taken the view in respect of the const
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the above grounds as well as to give detailed findings for the conclusion.
7. The appeal filed by M/s Lattice is argued by Shri A.K. Batra, Ld. Consultant. He also advanced his arguments against the grounds of appeal filed by Revenue. His submissions are summarized below:-
i. The Ld. CA submitted that five year period provided under Section 73 of the Act will start from the relevant date. The show cause notice dated 23/10/2013 was served on M/s Lattice only on 27/10/2013; to this effect the Affidavit has already been submitted before the adjudicating authority. If 27/10/13 is considered as the date of service of notice, the five year period cannot extend earlier than 1st October, 2008.
ii. He rebutted the view taken by the Revenue that adjudicating authority has not passed a speaking order. He referred to the findings of the adjudicating authority and he pointed out that the adjudicating authority has examined all the contracts executed by the service provider, copies of which have
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uch as the show cause notice proposed demand of service tax under the categories of Commercial or Industrial Construction Service as well as Erection Commissioning Service. In this connection he submitted that the findings of the adjudicating authority merit no interference.
iii. For the period from 01/07/2012, Ld CA submitted that the total amount of Rs. 3.9 Lakhs confirmed by the adjudicating authority is made up of the service provided to M/s Indian Oil Ltd as well as to Joint Stock Company FEAT as follows:-
Particulars
Taxable value Rs.
Rate
Service Tax liability Rs.
Taxable category
Indian Oil Corporation
1,85,318
12.36%
22,905
Not specified
Joint Stock Co. FEAT
29,71,710
12.36%
3,67,303
Total
3157028
3,90,208
iv. He further submitted that the demand in respect of m/s Indian Oil Corporation is pertaining to the period 2008-09 and as such not liable to be paid in view of the Larsen & Toubro case.
v. In respect of the demand of Rs. 3,67,303/- provided to Joint
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dicating authority has scrutinized these contracts and has dropped the demand for the period prior to 01/07/2012. He held that the construction activities carried out by M/s Lattice were correctly classifiable under Works Contract Service for the period prior to 01/07/2012 even though the adjudicating authority did not have the benefit of the decision of the Hon'ble Supreme Court in the case of Larsen & Toubro. We have perused the decision of the Apex Court in the case of Larsen & Toubro (Supra). The Apex Court has categorically held that composite contracts which involve supply of goods as well as providing service will be liable for payment of service tax only under the category of Works Contract Service. For the period prior to 01/07/2012, the classification of service was required to be done and activities carried out are to be classified under Works Contract Service. The show cause notice issued on 23/10/2013 has proposed the demand of service tax under the categories of Commercia
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st this service In this regard it has been pointed out by the Ld. CA that the liability for service tax under WCS is required to be determined after granting the benefit of Notification No. 24/2012 dated 20/06/2012. If such benefit is extended, the liability to service tax will come down and the claim of Ld. CA is that said service tax, after abatement, stands already paid by M/s Lattice.
11. We are of the view that the liability for service tax under WCS in respect of the activity carried out to Joint Stock Company is to be re-determined after extending the benefit of abatement under Notification No. 24/2012. When said benefit is extended the ultimate demand of service will come down from Rs. 3.67 lakh confirmed by adjudicating authority. We direct the original adjudicating authority to verify such payment of service tax claimed by the M/s Lattice.
12. In view of the above discussions we reject the appeal filed by the revenue. The appeal filed by M/s Lattice is allowed to the extent
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