2019 (5) TMI 235 - AT - Service Tax

Short payment of duty - period from 01.07.2003 to 31.03.2006 - Cargo Handling service or not - HELD THAT - In the present case, the appellants have provided manual labour for loading of urea and charcoal and thereafter for unloading the collection of loose urea for the internal shifting in the premises of M/s. DCM Shriram Consolidated Ltd. The entire shifting is otherwise done from the conveyer belt of the factory and the goods are actually used for being transported within the factory. It becomes clear that merely a fact of urea being loaded, the entire said activity does not qualify the aforesaid definition. Commercial and Industrial Construction Services - Benefit of N/N. 15/2004 dated 10.09.2004 - inclusion of value of free supply of material by the service recipient - HELD THAT - There is no error in the order vide which the tax liability for commercial and industrial construction services for ₹ 13,54,295/- has been confirmed. Maintenance and repair services - HELD THAT - It is an undisputed fact that appellants are discharging their liability qua the services post 16.06.2005. The Adjudicating authority has failed to consider the said aspect. Hence, the confirmation of demand for painting work of ₹ 33,660/- is liable to be set aside - the differential demand in respect of maintenance of railway track is hereby set aside. Canal closure - HELD THAT - The adjudicating authority has failed to consider that this activity was not for commercial purposes despite acknowledging that the canal site was owned by the Government of Rajasthan. The order confirming the demand of ₹ 34,379/- is, therefore, liable to be set aside. Excavation services - HELD THAT - The appellants have relied upon the certificate given by Ghiya services, the sister concern of the appellant declaring that they have duly paid service tax on the taxing higher income received from DCM Shriram Consolidated Ltd. to whom the taxis taken on rent from Khandelwal Construction Co. during the year 2004-05 and 2005-06 were supplied also that no service tax credit has been taken by them. The document is very much on record. But the adjudicating authority has failed to consider the same - Once the service tax liability stands already discharged, any confirmation of the demand for the same amount and the same period shall amount to double taxation, which is not permissible under statute - demand set aside. Time Limitation - HELD THAT - The appellant was under the bonafide belief otherwise also there is no evidence of the Department to prove any positive act on part of the appellant, which may amount to suppression or mis-representation of the facts that too, with an intent to evade payment of tax - the SCN dated 22.10.2008 proposing the demand for the period 01.07.2003 to 31.03.2006 has gone beyond the normal period of one year without the entitlement of the Department to invoke the extended period. Hence, the show cause notice as such, is held to be barred by time. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of services as cargo handling.
2. Tax liability under commercial and industrial construction services.
3. Taxability of maintenance and repair services.
4. Taxability of canal closure services.
5. Taxability of excavation services.
6. Tax liability under rent-a-cab services.
7. Invocation of the extended period of limitation.

Detailed Analysis:

Cargo Handling Service:
The Tribunal examined the definition of "Cargo Handling Services" and concluded that the appellant's activities of loading and unloading urea and charcoal within the factory premises do not qualify as cargo handling services. The Tribunal referenced the High Court of Punjab & Haryana's decision in Gajanand Aggarwal vs. Commissioner and the Tribunal's decision in Gaytri Construction Co. vs. Commissioner of Central Excise, Jaipur, which held that internal shifting of goods within a factory does not fall under cargo handling services. Consequently, the demand of ?5,36,325/- was set aside.

Commercial and Industrial Construction Services:
The appellant argued that they had already paid the service tax after availing the benefit of Notification No.15/2004, which excludes the value of free supply of materials by the service recipient. The Tribunal referenced the Supreme Court's decision in CCE vs. Bhayana Builders Pvt. Ltd. and noted that the appellant's view was consistent with the law. The Tribunal found no error in the order confirming the tax liability of ?13,54,295/- for commercial and industrial construction services, emphasizing that both the benefit of the notification and the Supreme Court's decision cannot be availed simultaneously.

Maintenance and Repair Services:
The Tribunal noted that maintenance and repair services became taxable only from 16.06.2005, and the appellant had discharged their liability for services post this date. The Tribunal set aside the demand of ?33,660/- for painting work and the differential demand for maintenance of railway tracks, as part payments had not been considered by the adjudicating authority.

Canal Closure:
The Tribunal observed that the canal closure activity was not for commercial purposes and was owned by the Government of Rajasthan. Therefore, the demand of ?34,379/- was set aside.

Excavation Services:
The Tribunal found that the work performed by the appellant was the extension of godowns, which cannot be classified as excavation services. The demand of ?1,42,978/- was set aside, as the nomenclature used in the bill could not alter the nature of the service provided.

Rent-a-Cab Service:
The appellant provided a certificate from their sister concern, Ghiya Services, stating that the service tax had already been paid. The Tribunal noted that the adjudicating authority failed to consider this evidence. Since the service tax liability had already been discharged, the demand of ?5,554/- was set aside to avoid double taxation.

Limitation:
The Tribunal held that the show cause notice dated 22.10.2008, covering the period from 01.07.2003 to 31.03.2006, was barred by time as it went beyond the normal period of one year. The Tribunal found no evidence of suppression or misrepresentation by the appellant, supporting their bonafide belief that the services were not taxable. The Tribunal referenced the Supreme Court's decisions in Anand Nishikawa Co. Ltd. vs. CCE, Meerut and Hindustan Steels Ltd. vs. State of Orissa to support this conclusion.

Conclusion:
The Tribunal set aside the entire demand and allowed the appeal, holding that the show cause notice was barred by time. The liability towards commercial and industrial construction services was acknowledged, but the demand was set aside due to the time-barred notice.