2009 (2) TMI 708 - Commissioner - Service Tax

The Commissioner of Central Excise (Appeals), Pune-II heard an appeal from M/s. Prakash Construction Engineers & Contractors against an Order-in-Original dated 24-6-2008. The case involved the appellant holding service tax registration for providing commercial or industrial construction services. The appellant was issued with two Show Cause Notices (SCNs) for short payment of service tax and failure to file ST-3 returns. The SCNs directed the appellant to show cause as to why service tax amount of Rs. 66,47,753, which was short paid during the period from April 2005 to March 2006, should not be demanded. The adjudication confirmed the amount raised in both SCNs along with interest and penalties. The appellant appealed the order, contesting the charges and penalties imposed. The appellant claimed to have correctly claimed and availed 67% abatement in value and paid service tax on 33% of the assessable value under relevant notifications. The appellant also argued that education cess was not payable again as demanded in the SCNs, as the amount had already been paid along with service tax. The appellant further contended that the imposition of various penalties was not sustainable. The appellant relied on various legal decisions to support their case. The Commissioner allowed the appeal by setting aside the impugned order. The case was heard on 2-2-2009, with the consultant appealing on behalf of the appellant. The department did not appear during the hearing. The consultant argued that the department wanted to deny the abatement of 67% by issuing two SCNs without any grounds. The consultant further submitted that the appellant had paid back the Cenvat credit availed on input service along with interest before the issuance of SCNs. The lower authority had disallowed the 67% abatement availed by the appellant and confirmed the duty along with interest. The Commissioner set aside the penalties imposed and allowed the appeal. The case involved a technical mistake regarding the payment of education cess under a separate heading, which was due to the government. The Board had clarified that this was a matter to be sorted out with the PAO. The lower authority had blindly decided that the appellant should pay education cess once again and imposed penalties. The Commissioner held that no penalty was imposable and set aside the penalties imposed under various sections. The Commissioner also noted that the OIO was issued after a lapse of 8 months, indicating that the adjudicating authority was not sure about the allegations made in the SCNs. The abnormal delay in issuing the OIO was to be enquired into. The Commissioner allowed the appeal by setting aside the impugned order. The case was allowed based on the facts and discussions presented. The Commissioner held that the appellant had not availed wrong credit and that the other benefits were rightly available to the appellant. The Commissioner set aside the penalties imposed and allowed the appeal.

Please note that this summary is based on the provided judgment and includes the key points discussed in the case. For a detailed understanding, it is recommended to refer to the original judgment.

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