Cst, Delhi vs M/S Bagai Construction

(Arising out of Order-in-Appeal No. 223/S. Tax/D-II/2012 dated 22.11.2012 passed by the Commissioner (Appeals),New Delhi)

For Approval & Signature :

Honble Mr. Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would 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 Department Authorities?

CST, Delhi Appellant

Vs.

M/s Bagai Construction Respondent

Appearance:

Shri B.B. Sharma, D.R. - for the Appellant

Shri Narendra Singhvi, Advocate - for the Respondent

Coram : Honble Mr. Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

F. Order No.52316/2015

Per R.K. Singh :

Stay petition along with appeal has been filed by Revenue against the Order-in-Appeal No. 223/ST/D-I/2012 dated 22.11.2012 in terms of which service tax demand of Rs.13,25,005/- confirmed along with interest and penalties by the primary adjudicating authority was set aside.

2. The issue involved in this case essentially is that the appellant paid service tax under the Works Contract Service @ 2.06% under Composition Scheme on the ground that service was rendered before 1.3.2008 although the payment was received after 1.3.2008, while the primary authority held that the correct rate of tax was 4.12% which was the rate applicable on the date of receipt of payment. The impugned demand arose as a result of the above dispute. It is contended by the respondent that the issue is no longer res integra and is settled by Delhi High Court in the case of Vistar Construction (P) Ltd. Vs. Union of India & Ors  2013-TIOL-73-HC-DEL-ST.

3. The ld. DR agreed that the said judgement of Delhi High Court covers the issue.

4. We have considered the respondents contention. We find that in the case of Vistar Construction (supra), the Delhi High Court has held that the taxable event, in so far as service tax is concerned, is the rendition of the service. That being the position, the taxable events in the present writ petition had admittedly occurred prior to 1.3.2008. At that point of time the rate of service tax applicable in respect of the services in question was 2% and not 4%, which came into effect only on or after 1.3.2008. Therefore the rate of tax applicable on the date of which the services were rendered would be the one that would be relevant and not the rate of tax on the date on which payments were received. The Delhi High Court in that judgement further held that the TRU Circular F.No. 545/6/2007-TRU dated 28.4.2008 is contrary to law as declared by the Supreme Court and therefore has no existence in the eyes of law.

5. In the light of the issue having been settled in favour of the respondent by the said judgement of Delhi High Court in the case of Vistar Construction (supra), we find no merit in the Revenues appeal. Therefore the stay petition and appeal are dismissed.

(Justice G. Raghuram)

President

(R.K. Singh)

Member (Technical)

RM

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