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2022 (10) TMI 805 - AT - Service TaxBenefit of Exemption - Notification No. 20/2003-ST - services under a contract with Transport Department Government of Gujarat for Repairs and Maintenance service of computerized system installed at the RTO check post from 03.12.2003 - HELD THAT - It is seen that the Notification No. 20/2003-ST provides exemption only to maintenance or repair of computers, computer systems or computer peripherals. The AVETCS systems can by no means be called computers, computer systems or computer peripherals. The mere fact that the AVETCS contains computer system does not make it Computers, Computer Systems or Computer Peripherals. In these circumstances, it is not that the appellant is entitled to the benefit of Notification No. 20/2003-ST and consequently, the appeal on this ground is dismissed. Imposition of penalty - payments for the period September, 2006 to March, 2007 and April, 2007 to June, 2007 - HELD THAT - The payments of service tax were made only after the initiation of preventive inquiry on 20.07.2007 and hence they cannot be treated as payments made during the normal course or prior to search conducted and therefore, the appellant s' contention in this regard does not merit consideration - penalty upheld. Appeal dismissed.
Issues:
1. Appellant's liability for Service Tax, interest, and penalties. 2. Applicability of Notification No. 20/2003-ST to the services provided. 3. Imposition of penalties on voluntary payments made by the appellant. Analysis: Issue 1: The appeal was filed against the demand for Service Tax, interest, and penalties by M/s. Chashmita Engineers Pvt Ltd. The services provided by the appellant included Management, Maintenance, Repair service, and erection commissioning and installation service. The appellant argued that the services provided were exempted from Service Tax under Notification No. 12/2003-ST until 09.07.2004. The appellant also sought a refund of Service Tax, interest, and penalties paid. However, the Adjudicating Authority had levied taxes on certain bills, leading to the dispute. Issue 2: The main contention revolved around the applicability of Notification No. 20/2003-ST to the services provided by the appellant in relation to the AVETCS system. The appellant claimed exemption under this notification, which exempted the taxable service provided in relation to maintenance or repair of computers, computer systems, or computer peripherals from Service Tax. The AVETCS system, as described in detail, did not fall under the purview of computers, computer systems, or computer peripherals, thereby disqualifying the appellant from the benefit of the said notification. Consequently, the appeal on this ground was dismissed. Issue 3: Regarding the imposition of penalties on voluntary payments made by the appellant, it was argued that the payments were made voluntarily. However, it was pointed out that these payments were made after an investigation was initiated by the preventive wing. The impugned order highlighted that the payments were not made in the normal course but after the initiation of the preventive inquiry, leading to the dismissal of the appeal on this count as well. The penalties and interest demanded were upheld based on the facts and circumstances presented in the case. In conclusion, the appeal was dismissed by the Appellate Tribunal CESTAT AHMEDABAD, upholding the demand for Service Tax, interest, and penalties against M/s. Chashmita Engineers Pvt Ltd. The judgment emphasized the specific provisions of the notifications and the timing of payments in relation to the initiation of inquiries, leading to the dismissal of the appeal on all counts.
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