Shree Balaji Engicons Pvt. Ltd. Vs. Commissioner, Central Excise, Customs and Service Tax - (Customs, Excise and Service Tax Appellate Tribunal) (04 Jun 2024)

Extended period of limitation cannot be invoked when there is no intention to evade payment of Service Tax

MANU/CK/0158/2024

Service Tax

In facts of present case, the Appellant have executed two work orders dated 31.07.2007 and 24.03.2007 for their client viz. Vedanta Aluminium Limited, Jharsuguda. The above said work orders executed by the Appellant are for: (i) piping work under railway line and (ii) boulder pitching for construction of road. The Appellant was of the view that, the services rendered in respect of railways and construction of road are exempted from levy of Service Tax and accordingly, had not paid Service Tax on the said activities.

A Show Cause Notice was thereafter issued to the Appellant demanding Service Tax of Rs.3,87,212 (including cess) for the period 2007-08, proposing to classify the services rendered by the Appellant under the category of 'commercial or industrial construction service'.

The Notice was adjudicated by the Learned Assistant Commissioner of Central Excise & Customs, who vide Order-in-Original confirmed the demand of Service Tax along with interest and imposed penalty equal to the quantum of Service Tax confirmed in the order. On appeal, the Learned Commissioner (Appeals) vide the impugned order has also upheld the demands confirmed in the Order-in-Original.

The appellant has executed two work orders to their client namely, Vedanta Aluminium Ltd. The work order dated 31.07.2007 is meant for piping work in respect of railway lines. A perusal of the said work order shows that the works have been rendered to the railways and during the relevant period, services rendered to the railways were exempted from Service Tax. It is also observed that, the other work order dated 24.03.2007 is actually meant for construction of road and there was no liability to discharge Service Tax in respect of the said services rendered towards construction of road.

Further, from the Work Orders, present Tribunal observe that the services rendered are rightly classifiable under the category of 'works contract service' as they involve transfer of property in goods. It is observed that the client has registered the aforesaid contracts under the Odisha Value Added Tax Act, 2004 and paid Works Contract Tax to the Government, but, in the Notice, no demand has been made under 'Work Contract Service'. Thus, the demand confirmed under 'Commercial or Industrial Construction Service' is not sustainable and hence present Tribunal set aside the same.

Regarding, the demand of service tax by invoking extended period of limitation, there is no suppression with intention to evade payment of Service Tax established in the present case. Hence, the Show Cause Notice demanding Service Tax for the period 2007-08 issued on 20th October, 2010 is barred by limitation. Accordingly, the demands confirmed in the impugned order are liable to be set aside on the ground of limitation also. The impugned order is set aside. Appeal allowed.

Tags : DEMAND CONFIRMATION LEGALITY