2024 (4) TMI 234 - AT - Service Tax

Non-payment of service tax - Service Tax Registration not taken - services were provided to the Government Department viz. Electricity Department of Daman (UT) - extended period of limitation - HELD THAT - It is found from the scrutiny of various invoices on record before us and which are of the impugned period the same were issued by the appellants to Assistant Engineer of Electricity Department Division-V Nani Daman. In relation to demand of Rs. 3, 18, 976/- having invoked through extended period and which was contested before us on the ground that Commissioner (Appeals) incorrectly held that work were not proved to be done in Residential or Commercial Localities as per Serial No. 5 of the Board Circular before or after point of distribution. Exemption was granted as per circular only up to material used like Electric cables and services provided up to distribution point. Learned Commissioner found that invoices produced by them were lacking in this regard - Learned Commissioner did not indicate that the material was used or services provided up to the distribution point and not beyond distribution point. It is found that this evidence of having done erection testing and laying of various material for Assistant Engineer Electricity Department does indicate that the material was used up to distribution point so as to become eligible for service being treated as non taxable. It is found from scrutiny of the document as above that very fact that invoices were issued in the name of Assistant Engineer Electricity Department indicates the same were for the purposes works done for Assistant Engineer of the electricity department. An evidence to this effect which is documentary in nature and which clearly indicates that this service was provided and invoice issued to the Government Department is sufficient to hold that services were in relation to work done up to distribution point. Therefore for invoices which indicate that they were issued to the electricity department no question of taxability of service will arise as per the above said board clarification. Only if there are any invoices in the name of private party can it be held that services were provided beyond distribution point. In view of the foregoing the demand if any made against the appellant shall be confined to the normal period of limitation. in above terms the department is directed to rework demand - Accordingly appeal is allowed by way of remand.

Summary

Issues Involved:
The issues involved in the judgment are non-payment of Service Tax by the Appellant, demand raised through Show Cause Notice, confirmation of the demand by the Joint Commissioner, appeal before the Commissioner (Appeals), and contesting the demand based on Circular No. 123/5/2010-TRU dated 24.05.2010 and Notification No. 11/2010-Service Tax dated 27.02.2010.

Issue 1: Non-payment of Service Tax and Demand Raised
The Appellant, engaged in various services, did not pay Service Tax under the belief that services provided to the Government Department were exempt. However, a search revealed non-compliance, leading to a Show Cause Notice demanding Service Tax, interest, and penalties. The Joint Commissioner confirmed the demand, which was upheld by the Commissioner (Appeals).

Issue 2: Contesting the Demand Based on Circulars
The Appellant contested the demand based on Circulars, arguing that certain services were not taxable as per Circular No. 123/5/2010-TRU and Notification No. 11/2010-Service Tax. They claimed a bona fide belief that no Service Tax was payable for services to the Electricity Department of Daman. The Appellant referred to CBEC for clarification, and the Circular issued supported their interpretation.

Issue 3: Examination of Service Tax Liability
The Order in appeal highlighted the contention that Service Tax should not be imposed on work done up to the Distribution Point, citing Circular No. 123/5/2010-TRU. The Appellant's defense lacked sufficient evidence to prove services were provided up to the distribution point of residential or commercial localities/complexes. Invoices submitted did not clearly indicate the scope and specifications of the work done, leading to uncertainty regarding tax liability.

Judgment Summary:
The Appellate Tribunal, after considering submissions and evidence, found that invoices issued to the Electricity Department indicated services provided up to the distribution point, making them non-taxable as per the relevant Circular. Invoices issued to private parties were subject to taxability assessment. The Tribunal directed the department to rework the demand, confining it to the normal period of limitation. The appeal was allowed in favor of the Appellant.