2015 (10) TMI 295 - AT - Service Tax

Industrial construction service - benefit of abatement of 67% under Notification NO.15/2004-ST - Held that - We are not in agreement with the contention that the services rendered at the residential houses in which employees of the respondent reside would be tantamount to rendering industrial construction service. Similarly an amount of ₹ 5,71,646/- received for painting of goods /material/other article other than building and civil structures would not be part of industrial construction service. However, Painting of walls of the floor of commercial building would fall under industrial construction service and being in the nature of completion and finishing service would not be entitled to abatement of 67% under Notification No.15/20045-ST. Disallowing such abatement and allowing exemption upto the value of 4 lakhs, Service tax liability of ₹ 36,233/- on taxable value of Rs,.3,55,229/- would arise. As regards the issue of wilful mis-statement or suppression of facts, we find that the only ground to sustain this allegation is that the respondent did not file ST-3 returns nor registered with the Service Tax department. However the Commissioner (Appeals) held that no service tax was liable. In the case of Continental Foundation Jt.Venture vs. CCE, Chandigarh-I- 2007 (8) TMI 11 - SUPREME COURT OF INDIA , the Supreme Court has in effect held that mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty - Suppression means failure to disclose full information with intent to evade payment of duty - An incorrect statement cannot be equated with a wilful mis-statement - There cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for purpose of proviso to Section 11A ibid - Mis-statement of fact must be wilful. In view of the said observation of Supreme Court and even the Commissioner (Appeals) holding that no service tax was payable, we are of the view that the allegation of suppression/wilful mis-statement is not sustainable as a consequence of which the demand is rendered time barred. - Decided against Revenue.

Summary

Issues:
1. Interpretation of taxable services under Industrial Construction Service.
2. Applicability of abatement under Notification No.15/2004-ST.
3. Allegation of wilful mis-statement or suppression of facts.

Analysis:
1. The case involved a dispute over the classification of services provided by the appellant under Industrial Construction Service. The Commissioner (Appeals) differentiated between services provided at a residential colony and painting of goods/material/other articles not related to building and civil structures. The Tribunal agreed that services at residential houses and painting of non-structural items did not fall under industrial construction service. However, it held that painting of walls in a commercial building constituted industrial construction service, rejecting the appellant's claim for abatement under Notification No.15/2004-ST.

2. The Tribunal addressed the issue of abatement under Notification No.15/2004-ST, emphasizing that painting of walls in a commercial building was not eligible for the 67% abatement. Consequently, the Tribunal calculated the service tax liability on the taxable value, disallowing the abatement and allowing exemption up to a specified limit. The decision was based on the nature of the service provided and the specific provisions of the notification.

3. The Tribunal examined the allegation of wilful mis-statement or suppression of facts by the appellant. The Revenue argued that the appellant's failure to file ST-3 returns and register with the Service Tax department constituted suppression. However, the Commissioner (Appeals) had ruled that no service tax was payable. Citing the case of Continental Foundation Jt. Venture vs. CCE, Chandigarh-I-2007, the Tribunal emphasized that mere omission to provide correct information does not amount to wilful mis-statement or suppression. The Tribunal concluded that the allegation of suppression was not sustainable, rendering the demand time-barred. Consequently, the Tribunal dismissed the Revenue's appeal based on the analysis and legal principles discussed.