Aarti Infra Projects Pvt. Ltd vs Commissioner Of Central Excise

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. I

Appeal No. ST/337/07

(Arising out of Order-in-Appeal No. AGS (169)31/09 dated 04.08.2009 passed by Commissioner of Central Excise (Appeals), Aurangabad)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

Aarti Infra Projects Pvt. Ltd. Appellant Vs.

Commissioner of Central Excise, Aurangabad Respondent

Appearance:

Shri Durgesh Nadkarni, Advocate for appellant Shri A.B. Kulgod, Asst. Commissioner (AR) for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical)

Date of Hearing: 10.07.2015 Date of Decision: 10.07.2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against Order-in-Appeal AGS (169)31/09 dated 04.08.2009.

2. Heard both sides and perused the records.

3. The issue involved in this case is regarding service tax liability under the category of Erection and Commissioning Service for the amount realized by the appellant for Maharashtra State Electricity Board (MSEB) during the period June 2006, September 2006, November, 2006 and September 2007.

4. Learned Advocate would draw our attention to the fact that the contract entered by the appellant with MSEB specifically talks about the same being works contract. Being a works contract, they were under bonafide belief that the activity undertaken by them i.e erection and commissioning service may not be covered under the service tax net. He would submit that as per the judgement of Larger Bench of this Tribunal in the case Larsen & Toubro Ltd. - 2015 (38) STR 266 (T-LB) the issue on merits is covered against them as the Larger Bench held that even if it is a works contract, service tax liability could be fastened upon the assessee. He would submit that the question of limitation needs to be addressed in this case as the show-cause notice has been issued on 29.01.2008 and the demand of the tax liability for the months of June and September are within limitation. He would also submit that the appellant had not taken registration certificate due to the bonafide belief.

5. Learned DR on the other hand would draw our attention to the findings recorded by the adjudicating authority on the limitation. It is his submission that the appellant never approached the department nor disclosed the activity undertaken by them. Hence extended period is correctly invoked.

6. On careful consideration of the submissions made by both the sides and on perusal of the records, we find on merits the issue is covered against the appellant as has been held by the Larger Bench of this Tribunal in the case of L & T (supra).

6.1 As regards the demand being hit by limitation i.e. for the period June 2006 and September 2006, we find merits in the submission made by the learned Counsel. It is noted that during the relevant period there were few decisions of the Tribunal holding that when a contract entered in case of works contract, it cannot be covered under the specific category, in this case of erection and commissioning service. Appellant could have entertained a bonafide belief that as the activity undertaken by the appellant may not be covered under the category of erection and commissioning services and would be covered under the works contract which not in statue during the material period i.e 2006, they have not discharged the service tax under the category of erection and commissioning service. To that extent we hold that the demand for the period June and September 2006 is hit by limitation and we allow the appeal to that extent. Since we have set aside the demand for the extended period consequently, interest liability and the penalty also needs to be set aside as the demands hit by limitation and we do so.

6.2 As regards the demand within the limitation period i.e. November 2006 and September 2007, we upheld the same along with interest and also penalties imposable under the provisions but as per the settled law penalty equivalent to service tax liability are to be confirmed and we do so.

6.3 Appeal is disposed of as indicated herein above.

(Dictated in Court)

(Raju) Member (Technical) (M.V. Ravindran) Member (Judicial)

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