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2019 (6) TMI 1596 - AT - Service TaxCENVAT Credit - input services - providing of Construction Services other than Residential Complex including Commercial/ Industrial Building or Civil Structures - entitlement to abatement as provided by Notification No 1/2006-ST - HELD THAT - The measure amounts received by the appellants i.e. ₹ 4,98,92,896/- was against the services provided by the Appellant under the category of Commercial and Industrial Construction services was in respect of the services provided by the Appellant to TNEB, Tuticorin during the period prior to 07.04.2012. It is admitted fact by the Commissioner that Appellants had taken the Centralized Registration in respect of the services provided under this category only from 20.04.2012. In respect of the Service provided by the Appellants from Tuticorin, they were having separate registration AAKCS7579PSD021 for providing taxable services under the category of Maintenance or Repair Services, Construction Service In Respect of Commercial or Industrial Buildings and Civil Structures in Tuticorin. For the services rendered in Tuticorin, appellants had filed ST-3 return without claiming any CENVAT Credit - Thus we are not in position to agree with the conclusion arrived by the Commissioner, that the demand is in respect of the Construction of Commercial or Industrial Complexes in respect of the major portion of demand. For the period after 20.04.2012, when the appellants had shifted and obtained registration under the category of Construction of Commercial or Industrial Complexes in their Centralized Registration at Nagpur, they have not taken any CENVAT Credit. Commissioner has himself rendered the finding that they had taken the disputed credit during the period October 2010 to March 2011. Thus the appellants had not availed any CENVAT Credit during the period after 20.04.2012 - appellants had not taken credit in respect of inputs or input services for rendering the services under the category of Construction of Commercial or Industrial Complexes . The benefit of abatement under Notification No 1/2006-ST is admissible subject to the condition imposed. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Demand and recovery of Service Tax. 2. Recovery of interest under Section 75 of the Finance Act, 1994. 3. Imposition of penalty under Section 77 of the Finance Act, 1994. 4. Imposition of penalty under Section 78 of the Finance Act, 1994. 5. Eligibility for abatement under Notification No. 1/2006-ST. 6. Centralized registration and CENVAT Credit availed. Detailed Analysis: 1. Demand and Recovery of Service Tax: The Commissioner confirmed a demand of Service Tax amounting to ?51,18,698/- under the proviso to Section 73(1) of the Finance Act, 1994. The appellants were found to have availed CENVAT Credit on input services, which disentitled them from claiming abatement under Notification No. 1/2006-ST. The appellants contended that they had not taken any CENVAT Credit on inputs/input services for the construction services provided at Tuticorin and thus were eligible for abatement. The tribunal found that the appellants had indeed not taken any CENVAT Credit for the services rendered under the category of "Construction of Commercial or Industrial Complexes" and thus were entitled to the abatement. 2. Recovery of Interest under Section 75 of the Finance Act, 1994: The Commissioner ordered the recovery of interest at the appropriate rate on the confirmed amount under Section 75 of the Finance Act, 1994. However, since the tribunal found that the appellants were entitled to the abatement and had not taken any CENVAT Credit for the relevant services, the basis for the interest recovery was negated. 3. Imposition of Penalty under Section 77 of the Finance Act, 1994: A penalty of ?10,000/- was imposed on the appellants under Section 77 of the Finance Act, 1994 for contravening various provisions. The tribunal's finding that the appellants were entitled to the abatement and had not taken CENVAT Credit suggests that the contravention alleged by the Commissioner was not substantiated, thus negating the basis for the penalty. 4. Imposition of Penalty under Section 78 of the Finance Act, 1994: A penalty equal to the Service Tax amount of ?51,18,698/- was imposed under Section 78 of the Finance Act, 1994 for suppressing the taxable value with intent to evade payment of Service Tax. The tribunal found that the appellants had not taken any CENVAT Credit on the input services used for providing the taxable services under the category of "Construction of Commercial or Industrial Complexes," thus negating the basis for the penalty under Section 78. 5. Eligibility for Abatement under Notification No. 1/2006-ST: The appellants argued that they were entitled to the abatement under Notification No. 1/2006-ST as they had not availed any CENVAT Credit on the inputs/input services used for the construction services provided at Tuticorin. The tribunal agreed with this contention, noting that the appellants had filed ST-3 returns for the Tuticorin site without claiming any CENVAT Credit. The tribunal referenced similar cases, such as Lemon Tree Hotels Private Ltd, to support their decision that the appellants were entitled to the abatement. 6. Centralized Registration and CENVAT Credit Availed: The Commissioner had noted that the appellants had centralized registration and had availed CENVAT Credit on input services from various premises. However, the tribunal found that during the period in question, the appellants were not registered for providing "Commercial or Industrial Complex Services" and had not taken any CENVAT Credit for these services. The tribunal's examination of the records and tables provided by the Commissioner showed that the appellants had not availed CENVAT Credit for the relevant period and services, thus entitling them to the abatement under Notification No. 1/2006-ST. Conclusion: The tribunal set aside the impugned order, finding that the appellants were entitled to the abatement under Notification No. 1/2006-ST as they had not taken any CENVAT Credit on the inputs/input services used for providing the taxable services under the category of "Construction of Commercial or Industrial Complexes." The appeal was allowed, and the order pronounced in the open court.
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