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TMI Blog2022 (5) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority was correct in classifying the services rendered by the appellant under Works Contract Service ? - HELD THAT:- The classification of taxable services has to be on the basis of nature of the work and terms of the contract. Though works contract has service and supply of goods as essential ingredients, vice-versa may not be true. The classification of services can be done only when the same falls under works contract as defined in the Statute. - There is force in the submissions of the appellant. The classification of the service should necessarily depend on the nature of the work and the contract and not on the basis of nomenclature - Whether the appellant is eligible for cum-duty benefit? - HELD THAT:- The appellant has made out a prima facie case for the cum-duty benefit - reliance placed in the case of P. JANI CO. VERSUS COMMR. OF SERVICE TAX, AHMEDABAD [ 2010 (7) TMI 297 - CESTAT, AHMEDABAD] where it was held that as regards the request for treatment of the amount received as inclusive of service tax, I agree with the contention of the learned advocate that the decision of the Tribunal in the case of COMMR OF C. EX CUS., PATNA VERSUS ADVA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial or industrial construction/residential complexes, erection commissioning or installation services and works contract services. The appellant filed an application under the Voluntary Compliance Encouragement Scheme [ VCES ] on 27.12.2013 accepting service tax liability of Rs.7,31,103/- and deposited the same in two instalments along with interest of Rs.14,460/-. On scrutiny of the declaration filed by the appellant and the profit and loss account, it was observed by the Department that during the period 2008-09 to 2012-13, the appellant received a total sum of Rs.3,39,22,967/- but did not discharge service tax to the tune of Rs.37,13,668/-. 2. A show cause notice dated 19.12.2014 was issued to the appellant seeking inter alia to reject the declaration filed by the appellant; demanding duty of Rs.37,13,668/- along with interest; and seeking to impose penalties under sections 76 78 of the Finance Act, 1994 [ the Finance Act ]. 3. The show cause notice was adjudicated by Order-in-Original dated 29.02.2016/ 02.03.2016 [ the impugned order ]. The Commissioner, while accepting the declaration and appropriating the amount declared and paid by the appellant under VCES, confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued and confirmed on the basis of Income Tax Returns. As the Tax Deducted at Source under the Income Tax Act, 1961 was calculated on the gross value, it has to be treated as cum-duty value. He submits that the Commissioner erred in following the ratio of the judgment of the Supreme Court in Amrit Agro Industries Limited vs. Commissioner of Central Excise, Ghaziabad [ 2007 (210) ELT 183 (SC) ]. He also submits that in view of the specific provisions and contained in section 67(2) of Finance Act, 1994, the ratio of the judgment cited is not applicable. 6. Learned counsel relies on the following decisions: (i) Commissioner of Central Excise Customs, Patna vs. Advantage Media Consultant [2008 (10) STR 449 (Tri.-Kol.)] upheld by Commissioner vs. Advantage Media Consultant [2009 (14) STR J49 (SC) ]; (ii) P. Jani Company vs. Commissioner of Service Tax, Ahemdabad [2010 (20) STR 701 (Tri.-Ahmed.)]; (iii) Spandana Spoorthy Financial Limited vs. Commissioner of Central Excise Service Tax, Hyderabad-IV [2016 (45) STR 265 (Tri.-Hyd.) ]; and (iv) ICICI Econet Internet Technology Fund vs. Commissioner of Central Tax, Bangalore North [2021 (51) GSTL 36 (Tri.-Bang.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; hence, benefit of cum-duty value is not admissible. 10. Heard both sides and perused the records of the case. 11. Brief issues that require consideration are: a . Whether there is a calculation error in the demand confirmed; b . Whether the adjudicating authority was correct in classifying the services rendered by the appellant under Works Contract Service ; c. Whether the appellant is eligible for cum-duty benefit; and d. Whether the appellant is eligible for exemption on the service rendered for construction of a road. 12. The appellant submits that there are factual errors in the computation of the demand, since while the Commissioner holds that differential amount of Rs.1,29,744/- is recoverable from the declarant, he proceeds to confirm the amount of Rs.3,64,587/-. 13. The Commissioner in paragraph 34 of the order arrived at the differential duty payable by way of a Chart and finds that: I also hold that the differential amount of Rs.1,29,744/- is recoverable from the declarant under section 73 of the Finance Act, 1994 read with Section 111 of Finance Act, 2013. However, he has confirmed an amount of Rs.3,64,587/-. The appellant has given a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, they are entitled to pay the service tax @ 4% plus cess as specified for the period up to 31.03.2012 and at the rate of 4.8% and cess with effect from 01.04.2012. I also find that with effect from 01.07.2012, as per Notification No.30/2012-ST dated 20.06.2012, the service tax payable on the service shall be paid 50% by the service provider and 50% by the service receiver. Accordingly, they are liable to pay service tax on their services. I further find that in respect of contract no.2204-30.09.2011 as discussed above, the services provided by the declarant are related to repair maintenance and hence the same covered under Management, Maintenance or Repair Services defined under Section 65(64) of Finance Act, 1994 . 16. The appellant claims that Commissioner has given a finding that the activities undertaken by the appellant come under works contract because the appellant got itself registered for works contract service. He submits that in case of registration, the Department gives registration to the assessee and not a license to render the service and if a registered assessee provides any service other than that specified service in the application for registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and proper. 20. There is force in the submissions of the appellant. The classification of the service should necessarily depend on the nature of the work and the contract and not on the basis of nomenclature. 21. Learned counsel for the appellant has vehemently canvassed that cum-duty benefit is applicable and that Commissioner has denied the benefit only on the basis that the work orders/contracts do not mention whether the value shown in work orders is cum-tax value under section 67(2) of the Finance Act. Learned counsel further submits that in this case, the demands have been issued on the basis of Income Tax returns. Since, the TDS under IT Act, 1961 have been deducted on the gross value including ST, the value shown in 26AS has to be considered as cum-tax and not ex-tax and the orders passed by the Supreme Court in Amrit Agro Industries Limit vs. Commissioner of Central Excise, Ghaziabad [ 2007 (210) ELT 183 (S.C.) ], is not applicable in this case, as there is a specific section 67(2) in Finance Act on the subject. The value charged in the bills should be taken as cum-tax in view of decision of the Supreme Court in Advantage Media Consultants. Learned counsel relies up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate between a public road or a private road. Therefore, it appears that the observations of the Commissioner are not correct. 26. In view of the above discussion, the impugned order has not appreciated the legal position correctly and has not given findings backed by law and reason. The appellant did not place on record the necessary documents and submissions before the Commissioner. Therefore, in the interest of justice, the issue requires to be remanded to the adjudicating authority for proper appreciation of law and the facts of the case in the light of the submissions of the appellant. The appellant may submit the necessary documentary evidence and submissions before the adjudicating authority. 27. The Commissioner has also imposed penalty on the appellant. Understandably, this is a case opened up after a declaration had been filed by the appellant under the VCES. Though, the authorities can verify the correctness of the claim of the appellant and arrive at the exact tax liability, imposition of any penalty would be detrimental to the Scheme itself. In fact, imposition of penalty would defeat the very purpose of bringing in such an amnesty Scheme to encourage voluntary t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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