Commr. Of Central Excise-Dibrugarh vs M/S. North Eastern Cable &

(ARISING OUT OF ORDER-IN-ORIGINAL NO.09/ST/ADJ/COMMR/DIB/11 DATED-04/10/2011 PASSED BY THE COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, DIBRUGARH)

FOR APPROVAL AND SIGNATURES OF

DR. D.M.MISRA, HONBLE JUDICIAL MEMBER DR. I.P.LAL, HONBLE TECHNICAL MEMBER

1. Whether Press Reporters may be allowed to see : 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 : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not ?

3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : Authorities?

Commr. of Central Excise-Dibrugarh

APPLICANT/APPELLANT COMMISSIONER

VERSUS M/s. North Eastern Cable & Conductors Pvt. Ltd. ...RESPONDENT (S)

APPEARANCE:

Shri K. Chowdhury, Supdt. (A.R.)

FOR THE REVENUE.

Sri Santosh Kr. Gupta, Advocate

FOR THE RESPONDENT(S).

CORAM:

DR. D.M.MISRA, HONBLE JUDICIAL MEMBER DR. I.P.LAL, HONBLE TECHNICAL MEMBER

Date of Hearing & Decision:18.03.2015

ORDER NO.FO/A/75197/2015

Per Dr. D.M. Misra

This is an appeal filed by the Revenue against Order-in-Original No. 09/ST/ADJ/COMMR/DIB/11 DATED-04/10/2011.

2. Briefly stated the facts of the case are that on the basis of an audit objection, the respondent was issued with the demand notice alleging non-payment/short payment of Service Tax during the period 2006-07, 2007-08 and 2008-09. It has been alleged that the applicant has not paid Service Tax of Rs.1,18,32,451/- for the period 2006-07 and 2007-08 in relation to the services rendered through their sub-contractors under the category of erection, commissioning or installation service to M/s. Assam Electricity Board. Also, it was alleged that during the period 2008-09, they have short paid Service Tax of Rs.73,99,165/- on the value shown in their Balance Sheet in comparison to the value declared in the ST-3 Returns. On adjudication, the Ld. Commissioner dropped the proceedings initiated against the respondent-assesse.

3. Aggrieved by the said order, the Revenue is in appeal.

4. The Ld. A.R. for the Revenue Shri Chowdhury has submitted that the Ld. Commissioner has erroneously dropped the demand of Rs.1.18 Crores observing that the sub-contractor who had rendered the services to the appellant are liable to discharge the Service Tax and not the respondent assesse. He has submitted that the appellant had rendered the services of erectioning, commissioning or installation services to M/s. Assam Electricity Board as an installation and commissioning Agency. Therefore, during the audit of the records, it was noticed that the appellant though received the amount and paid to their sub-contractors who are called as Sardars but not discharged any Service Tax on the same. On the issue of short payment of Service Tax, the Ld. A.R. for the Revenue has submitted that without scrutinizing the evidences on record, the Ld. Commissioner has dropped the demand observing that the said amount has not been received in the year 2008-2009.

5. The Ld. Advocate, on the other hand, for the Respondent assesse submitted that the amount received from Assam State Electricity Board by them in relation to erectioning, commissioning or installation services had been disclosed in their ST-3 Returns and applicable Service Tax discharged by them. It is his categorical submission that the bills raised by the sub-contractors, also reflected in the gross taxable value disclosed in their ST-3 Returns and suffered duty. It is his submission that there is no necessity of service tax again to be paid on the amount paid to the Sardars for carrying out the services of erectioning, commissioning or installation service during the relevant period. Regarding the short payment of service tax, the Ld. Advocate categorically submitted that since in the year 2008-09, they have not received the amount mentioned in the Show Cause Notice, accordingly, no Service Tax was paid.

6. In his rejoinder, the Ld. A.R. for the Revenue submits that no evidences have been placed by the Ld. Commissioner (Appeals) nor discussed in the impugned order indicating that the amount paid to the contractors have been included in the gross taxable value shown in their ST-3 Returns. He submits that the matter may be remanded to the adjudicating authority to scrutinize the evidences in this regard.

7. Heard both sides and perused the records. We find that the Ld. Commissioner has dropped the demand notice on both the counts i.e. non-payment of service tax on the value of erectioning, commissioning or installation services alleged to have been received from Assam State Electricity Board and paid/reimbursed to sardars/contractors which had not suffered service tax. Secondly, that even though certain amount have been received towards rendering of services during 2008-09 but no Service Tax was paid on the same. We have carefully considered the impugned order, we do not come across any finding where Ld. Commissioner has analysed the evidences e.g. the work order issued by the Assam State Electricity Board, the conditions of payment and the scope of the work undertaken by the appellant and the work executed through its sardars etc., the Ld. Advocate categorically claims that there have been no sub-contractors and the sardars appointed by them are virtually the employees of the appellant. Therefore, the amount paid/re-imbursed to the sardars need not suffer service tax even though it relates to erectioning, commissioning or installation services. It is also claimed that while discharging service tax on the gross taxable value received from Assam Electricity Board, they have also included the amount paid to the sardars/sub-contractors. This aspect needs to be scrutinized and verified through evidences. The Ld. Advocate undertakes to produce all the evidences before the Ld. Commissioner to satisfy that the amount paid to sardars/sub-contractors have suffered service tax and also during the period 2008-2009, they have not received the amount shown in the notice and hence no service tax was paid and payable. In the result, the impugned order is set aside and the matter is remanded to the Ld. Commissioner for deciding all issues afresh after recording a detailed reasoning on all the evidences available on record and that would be produced by the respondent assesse during the course of adjudication. Appeal is allowed by way of remand.

(Operative part of the order already pronounced in the Court) Sd/- 07/04/2015 Sd/- 07/4/2015 (DR.I.P.LAL) (DR. D.M. MISRA) TECHNICAL MEMBER JUDICIAL MEMBER

k.b/-

Service Tax Appeal No. 40/2012, C.O. 8/12

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