2013 (3) TMI 311 - AT - Service Tax

Commercial and Industrial Construction Services - demand of service tax - assessee contested against invoking extended period of limitation - Held that - The appellants are liable to pay service tax under Works Contract services with effect from 1.6.2007 and have get themselves registered with the service tax department from 1.6.2007. The ground taken by the appellants that they were not aware of the fact that they are liable to pay service tax under works contract with effect from 1.6.2007 is not sustainable, as ignorance of law is not an excuse. As the activity of the appellants has been detected by the Department during the course of investigation, the findings of the first appellate authority for invoking extended period of limitation confirmed. Against assessee.

Summary

Issues: Liability under Commercial and Industrial Construction Services vs. Works' Contract Services, Invocation of extended period of limitation, Applicability of Section 80 of the Finance Act, 1994

Liability under Commercial and Industrial Construction Services vs. Works' Contract Services:
The case involved a dispute regarding the taxability of construction activities carried out for BSNL. The Revenue argued that the services provided fell under 'Commercial and Industrial Construction Services,' while the appellants contended that they should be taxed under 'Works' Contract service.' The first appellate authority held that the appellants were liable to pay service tax under Works' Contract services from 1.6.2007. The Tribunal agreed with this finding, stating that the appellants failed to register themselves under Works' Contract Services and upheld the tax liability under Works' Contract services from the specified date.

Invocation of extended period of limitation:
The appellants contested the invocation of the extended period of limitation and the imposition of penalties. They argued for the extension of the benefit under Section 80 of the Finance Act, 1994. However, the Tribunal held that the appellants' lack of awareness regarding their tax liability was not a valid excuse, emphasizing that ignorance of the law does not absolve one from compliance. The Tribunal also noted that the Department discovered the appellants' activities during an investigation, justifying the invocation of the extended period of limitation. Consequently, the Tribunal upheld the penalties and dismissed the appeals.

Applicability of Section 80 of the Finance Act, 1994:
The appellants sought the benefit under Section 80 of the Finance Act, 1994. However, the Tribunal did not grant this benefit, citing the appellants' failure to register under Works' Contract Services and their lack of awareness regarding their tax liability as reasons for upholding the penalties and dismissing the appeals.

In conclusion, the Tribunal affirmed the tax liability under Works' Contract services from 1.6.2007, upheld the invocation of the extended period of limitation, and dismissed the appeals filed by the appellants, emphasizing that ignorance of the law does not excuse non-compliance and justifying the penalties imposed based on the Department's investigation findings.