2018 (7) TMI 96 - AT - Service Tax

Classification of services - doing carpentry in an old building - Commercial and Industrial Construction Services or not? - Held that - We have gone through the definition of Commercial or Industrial Construction Services and find that the same includes the carpentry work also. Further said Clause (d) of the definition refers to repair alteration renovation or restoration or similar services in relation to Clauses (b) and (c). This clearly leads us to conclude that the carpentry work done for repair renovation of the buildings is also included in the said definition - the appellant subsequently had taken the service tax registration and started paying service tax on the same activities for the subsequent period - decided against assessee. Extended period of limitation - Held that - The fact that the appellant started paying duty for the subsequent period even though the same was under a wrong belief the same belief should have made him to pay duty for the previous year also instead of suppressing the value of the work done during that period - the appellant acted with a mala fide and suppressed the work done by him during the period 2005-06 in which case the longer period stands rightly invoked by the Revenue. As regards the assessee s contention that part of the demand is even beyond the period of 5 years we note that as per the letter of the Superintendent addressed to the assessee the show cause notice was pasted at his residential premises on 23.04.2010 itself. It is only subsequently when they asked another copy of the show cause notice the same was provided to them vide letter dated 15.11.2010 by stating that the same already stands served upon the assessee. As such we do not find merits on the said plea also. Demand of duty with penalty u/s 78 upheld - as regards imposition of penalty in terms of Section 77 of the Act we find that as already full penalty stands imposed under Section 78 there may not be justification for imposition of separate penalty under Section 77 of the Act - appeal allowed in part.

Summary

Issues Involved:
Demand confirmation under Commercial and Industrial Construction Services, Penalty under Section 78 of the Finance Act, 1994, Penalty under Section 77 for contravention of Section 69, Interpretation of the definition of Commercial or Industrial Construction Services, Limitation period for issuing show cause notice.

Analysis:

1. Demand Confirmation under Commercial and Industrial Construction Services:
The judgment addresses the demand confirmation of ?78,669 against the appellant, along with penalties under Sections 78 and 77 of the Finance Act, 1994. The appellant was alleged to have provided services falling under the definition of Commercial and Industrial Construction Services by undertaking Carpentry work on a building during the year 2005-06. The appellant contended that their carpentry work in an old building did not fall under the category of Commercial or Industrial Construction. However, the Tribunal found that the definition of Commercial or Industrial Construction Services includes carpentry work for repair, renovation, or restoration, which was also confirmed by the appellant registering and paying service tax for the same activities in subsequent periods.

2. Penalty under Section 78 of the Finance Act:
The judgment discusses the imposition of penalties under Section 78 of the Finance Act, 1994, for the appellant's failure to obtain a registration certificate during the period in question. The Tribunal upheld the demand of duty along with the penalty under Section 78, emphasizing that the appellant, despite registering and paying service tax for subsequent periods, failed to discharge their tax liability for the previous year, indicating a mala fide intention to suppress their work done during 2005-06.

3. Penalty under Section 77 for Contravention of Section 69:
The judgment further delves into the penalty imposed under Section 77 of the Finance Act for contravention of Section 69, which was set aside by the Tribunal. The Tribunal reasoned that since a full penalty was already imposed under Section 78, there was no justification for an additional penalty under Section 77, leading to the setting aside of the penalty under Section 77 of the Act.

4. Interpretation of the Definition of Commercial or Industrial Construction Services:
The Tribunal analyzed the definition of Commercial or Industrial Construction Services, noting that carpentry work for repair, renovation, or restoration falls under the said definition. The Tribunal emphasized that the appellant's subsequent registration and payment of service tax for similar activities in later periods indicated that the appellant's activities were indeed covered by the definition, rejecting the appellant's argument to the contrary.

5. Limitation Period for Issuing Show Cause Notice:
Regarding the limitation period for issuing the show cause notice, the Tribunal observed that the notice was issued within the extended period of limitation. Despite the appellant's claim that the notice was served beyond the maximum limitation period of 5 years, the Tribunal found no merit in this argument, as the notice was deemed to have been served at the appellant's residential premises within the stipulated time frame.

This comprehensive analysis of the judgment highlights the key issues addressed, interpretations made, and decisions rendered by the Tribunal concerning the demand confirmation, penalties imposed, interpretation of legal definitions, and the limitation period for issuing show cause notices.