Commissioner Of Central Excise vs Deepak Kumar Uttamchand Advani

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I

Appeal No. ST/83/11 ST/CO-91045/13

(Arising out of Order-in-Appeal No. SR/421/NGP/2010 dated 30.11.2010 passed by Commissioner of Central Excise & Customs (Appeals), Nagpur)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, 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?

Commissioner of Central Excise Nagpur Appellant Vs.

Deepak Kumar Uttamchand Advani Respondent

Appearance:

Shri S.R. Nair, E.O. (A.R.) for appellant Shri Durgesh Nadkarni, Advocate for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing:13.08.2015 Date of Decision:13.08.2015

ORDER NO

Per: M.V. Ravindran

This appeal is filed by Revenue against Order-in-Appeal No. SR/421/NGP/2010 dated 30.11.2010. The assessee-respondent has filed a Cross Objection against the appeal filed by the Revenue.

2. Heard both sides and perused the records.

3. The issue involved in this case is whether the respondent herein is liable to discharge the service tax during the period 10.09.2004 to 31.03.2008 on an amount received by him towards the work executed which the department feels to fall under the category of Commercial and Industrial Constructions Service while the respondent feels that the work is executed under a works contract hence would be liable for tax only from 01.06.2007. The adjudicating authority has confirmed the demand raised with interest and also imposed penalties. On appeal, the first appellate authority has set aside the impugned order on the ground that prior to 01.06.2007 the contract cannot be vivisected and the contract in this case being works contract, question of vivisecting them and demanding duty under Commercial and Industrial Constructions Service would not arise.

4. After hearing the submissions made by both sides and perusal of the records, we find on merits the issue is now decided by the Tribunal in the case of Larsen and Toubro Ltd. V. Commissioner of Service Tax, Delhi  2015 (318) ELT 633 (Tri.  LB). The full Bench has held that contracts entered into prior to 01.06.2007, even if they are works contract, they can be vivisected and service tax can be demanded. Respectfully following the same, we hold that the issue on merits is against the respondent and the contract entered by them can be vivisected and service tax liability can be demanded on the service portion in the said contract. Accordingly, service tax and interest thereof are upheld and to that extent Revenues appeal is allowed and the impugned order is set aside.

4.1 Learned Counsel appearing for the respondent argued that the entire demand is time barred.

4.2 We find no merits in the arguments made by the learned Counsel in as much there is nothing on record to show that the respondent had infact kept the department informed about the activities.

4.3 As regards the contention of learned D.R. that penalty under Section 76 of the Finance Act, 1994 should be imposed on respondent, we find that the penalty which is sought to be imposed is unwarranted in as much the entire issue of whether the composite contract/works contract should be vivisected or not was the question of dispute before the judicial forum. The five Members full Bench of the Tribunal has concluded the issue in March 2015 hence the issue being a question of classification and the valuation, we are of the view that the respondent could be entertained a bonafide belief as to non-applicability of service tax on the contract executed by them. We find that the respondent had a reasonable cause of non-discharging the service tax for the material period in question. By invoking the provisions of Section 80 of the Finance Act, 1994, we waive the imposition of penalty under Section 76 of the Finance Act, 1994.

5. Appeal is disposed of as indicated herein above. Cross Objection filed by the respondent is also disposed of.

(Dictated in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

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Appeal No. ST/83/11