Commissioner Of Central Excise, Nashik vs M/S. Ashoka Buildcon Ltd

IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV

APPEAL NO. ST/111/12-Mum APPLICATION NO. ST/CO/69/12

(Arising out of Order-in-Appeal No. AKP/207/NSK/2011 dated 23.12.2011 passed by the Commissioner of Central Excise & Customs (Appeals), Nashik.)

For approval and signature: Honbl Shri P.S. Pruthi, Member (Technical) Honble Shri Ramesh Nair, Member (Judicial)

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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 : Yes 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? =====================================================

Commissioner of Central Excise, Nashik

: Appellant Versus

M/s. Ashoka Buildcon Ltd.

: Respondent Appearance Shri B.K. Iyer, Supdt. (A.R.) : For Appellant Shri Bharat Raichandani, Advocate : For Respondent

CORAM: HONBLE SHRI P.S. PRUTHI, MEMBER (TECHNICAL) HONBLE SHRI RAMESH NAIR, MEMBER (JUDICIAL)

Date of Hearing : 13.10.2015 Date of Decision: 13.10.2015

ORDER NO....................................................... Per: P.S. Pruthi:

Revenue has filed this appeal against the impugned Order-in-Appeal No. AKP/207/NSK/2011 dated 23.12.2011 passed by the Commissioner of Central Excise & Customs (Appeals), Nashik. Cross objections are filed by the respondent.

2. In this case a show-cause notice was issued on the basis that the respondent had paid Service Tax under the composition scheme under Works Contract Service from the month of June, 2007. But they had not obtained registration under the Works Contract Scheme category till 29.06.2007. Therefore Service Tax was demanded at the normal rate by disallowing the benefit of composition scheme. The adjudicating authority confirmed the demand on the basis that the respondent cancelled the old contract and entered into a new contract to take benefit of composition scheme. In appeal, the Commissioner (Appeals) set aside the order passed by the adjudicating authority on two accounts. Firstly, he held that the Order-in-Original went beyond the grounds invoked in the show-cause notice. Secondly, he held that in terms of Rule 4 of Service Tax Rules, application for registration can be made within 30 days of commencement of business. And further the Service Tax under composition scheme in terms of Rule 3 of Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, the option to avail the scheme should be exercised prior to payment of Service Tax which was done in the present case. Further he observed that the earlier contract was cancelled as per agreement dated 30.05.2007 and new agreement was signed on 06.06.2007. He came to the conclusion that they are two distinct contracts.

3. Heard both sides and considered the submissions.

4. We find that in this case there is no violation of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. Rule 3 of the Rules require that the option to pay tax under composition scheme should be exercised before payment of Service Tax. It is seen that the registration under Works Contract Service was taken on 29.06.2007 and the Service Tax was paid on 5th/6th July, 2007. In view of this fact as well as the fact that under Rule 4 of Service Tax Rules the registration may be applied for within 30 days of commencement of business, the show-cause notice has no basis. The adjudicating authority proceeded to pass the Order on a completely fresh ground and therefore the order is liable to be set aside on this ground alone. The Commissioner correctly placed reliance on various judgements such as Godrej Industries Ltd. Vs. CCE, Mumbai  2008 (229) ELT 484 (SC) and Tribunal decision in the case of Dhampur Sugarmills Ltd. Vs. CCE, Meerut  2010 (260) ELT 271 (Tri-Delhi). On the other hand the reliance placed by Revenue in case of CCE, Jaipur Vs. Ashoka Industries  2011 (266) ELT 230 (Tri.-Delhi) is out of context. In the case of Ashoka Industries the dispute was regarding production of a certificate to avail the benefit of Notification No. 108/95  CE. In that context it was held that as the basic issue is discussed in the show-cause notice, the order cannot be caused on some minor point. But in the present case the issue in the show-cause notice and the Order are different.

5. We also note that the Commissioner recorded a clear finding that in the absence of any evidence to show that the new contract was merely an eye wash is not supported by any documentary evidence. No proof is forthcoming from the records that the earlier contract was cancelled and fresh contract signed on 06.06.2007 merely to avail the benefit of a composition scheme which come into effect on 01.06.2007. The appellant made submission before the Commissioner that the old contract had to be terminated due to delay. Revenue has not even cited the details of the old contract and the new contract and compared the two to come to the conclusion that they were same and the change of contract was not a bonafide Act.

6. Having view that the demand is not sustainable, we do not find it necessary to go into the aspects of time limitation.

7. The appeal is dismissed and Cross Objections also stand disposed.

(Pronounced in open Court)

(Ramesh Nair) (P.S. Pruthi) Member (Judicial) Member (Technical)

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APPEAL NO. ST/111/12-Mum APPLICATION NO. ST/CO/69/12