9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 2 - AT - Service TaxReversal of Cenvat Credit - Input Services - Providing taxable and exempted services - Double credit - Receipt of credit for the benefit of subsidiaries - activity of construction services of roads, power plant, airport, etc. being commercial or industrial buildings or civil works - BAS - consulting engineering services - management or business consulting services - commercial training or coaching Centre services - Activity of construction of toll plaza, administrative building etc. - Rule 6(3) of Cenvat Credit Rules - allegation of double credit taken by the appellant - CENVAT Credit - absence of valid documents - Board s Circular No. 80/10/2004-ST dated 17.9.2004 - Extended period of limitation - penalty. HELD THAT - All the services have been used by the appellant in providing output service and thus eligible under the definition of input service under Rule 2(l) of CCR; from the facts on record, it is found that the appellant have already reversed an amount of ₹ 59,43,283/- out of disputed credit for the period October 2007 to December, 2012; the learned Commissioner has erred in holding that banking and financial services, credit rating services are not used for providing output services; such services are required to raise funds, which is essential to carry out the business of the appellant and hence the same is held to be eligible service; as regards the allegation that certain processing charges/banking service was related to GMR Infrastructure Limited (subsidiary company) as reflected in additional credit arrangement letter of the bank, whereas the invoice is in the name of the appellant towards loan processing fee; as the appellant company benefits from profitability and working of subsidiary company, thus the banking and financial charges are eligible input service in respect of the appellant - there is no specific reason assigned for disallowance of Cenvat credit for other input services by the learned Commissioner. Penalty - HELD THAT - There are no case of suppression, fraud, etc. is made out against the appellant; further, admittedly appellant have maintained proper books of accounts and registers of the transactions and also regularly filed the ST-3 returns and paid the admitted taxes; further, appellant deposited substantial amounts by way of reversal or deposit at the time of audit which have been appropriated in the impugned order; Amount reversed/paid matches the disallowed amount; under such circumstances, we hold that penalty under Section 78 is not attracted - the penalty under Section 77(2) of the Finance Act is also not attracted, hence set aside. Classification of service for the period from 1.6.2007 - HELD THAT - Revenue holds that the services to be classifiable as construction service under Section 65(105)(zzq), where as per the appellant holds the same to be classifiable under the works contract service defined under Section 65 (105)(zza) of the Act; considering the rival contentions, it is found that admittedly the appellant have executed works contract along with materials, thus, under the facts and circumstances, the construction services are classifiable under works contract service and not as construction service. Thus, under the facts and circumstances, penalty imposed under Rule 15(3) of CCR is also set aside. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Taxability of construction services for toll plazas, administrative buildings, and restrooms. 2. Reversal of Cenvat credit under Rule 6(3) of Cenvat Credit Rules (CCR). 3. Alleged double availing of Cenvat credit. 4. Disallowance of Cenvat credit on various input services. 5. Imposition of penalties under Section 78 and Section 77(2) of the Finance Act. 6. Classification of services under the correct service tax category. Issue-wise Detailed Analysis: 1. Taxability of Construction Services for Toll Plazas, Administrative Buildings, and Restrooms: The appellant contended that the construction of toll plazas, administrative buildings, and restrooms is part of road construction and thus exempt from service tax. The Tribunal accepted this argument, noting that these structures are integral to the road and have no separate commercial existence. The Tribunal referenced Board’s Circular No. 80/10/2004-ST and several case laws, including *Larsen and Toubro Limited Vs. Union of India* and *Archi-structural Constructions India P. Ltd. Vs. CCE, Coimbatore*, to support the view that such constructions are part of an indivisible contract and not taxable separately. Consequently, the demand for service tax on these constructions was set aside. 2. Reversal of Cenvat Credit under Rule 6(3) of CCR: The appellant had reversed the proportionate Cenvat credit amounting to ?1,94,46,310/- as required under Rule 6(3A) of CCR before the issuance of the show cause notice. This reversal, along with the interest of ?24,69,859/-, was acknowledged by the Tribunal, and the demand was appropriated accordingly. 3. Alleged Double Availing of Cenvat Credit: The Tribunal noted that the appellant had reversed the amount of ?7,58,737/- alleged to be taken twice before the issuance of the show cause notice. This amount was also appropriated in the adjudication order, and the appellant did not dispute this reversal. 4. Disallowance of Cenvat Credit on Various Input Services: The Tribunal examined the disallowance of Cenvat credit amounting to ?5,81,31,723/- and ?3,39,24,751/- for different periods. The appellant argued that the input services in question (e.g., advertising, air travel, banking, advisory, manpower recruitment, security, and works contract services) were used in providing output services and thus eligible for credit under Rule 2(l) of CCR. The Tribunal found that these services were indeed used in providing output services and therefore eligible for credit. The Tribunal also noted that the appellant had already reversed ?59,43,283/- of the disputed credit. The Tribunal found the Commissioner’s disallowance of banking and financial services to be erroneous and allowed the credit. 5. Imposition of Penalties under Section 78 and Section 77(2) of the Finance Act: The Tribunal found no evidence of suppression, fraud, or intent to evade tax by the appellant. The appellant had maintained proper books of accounts, filed regular returns, and reversed or deposited substantial amounts during the audit. The Tribunal concluded that the extended period of limitation was not applicable, and penalties under Section 78 and Section 77(2) were not warranted. Consequently, these penalties were set aside. 6. Classification of Services under the Correct Service Tax Category: The Tribunal addressed the classification issue, where the Revenue classified the services under "construction service" (Section 65(105)(zzq)), while the appellant argued for "works contract service" (Section 65(105)(zza)). The Tribunal found that the appellant had executed works contracts involving materials, and thus the services should be classified under "works contract service." The penalty imposed under Rule 15(3) of CCR was also set aside. Conclusion: The Tribunal set aside the service tax demands, except for the undisputed portions, and ruled that the extended period of limitation was not applicable. All penalties were also set aside, and both appeals were allowed with consequential benefits.
|
