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TMI Blog2023 (6) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... hire charges from renting out their equipment which, according to the Revenue, fell under the category of 'supply of tangible goods' service in terms of Section 65(105)(zzzzj) of the Finance Act, 1994. 2.2 It appears that the appellant had also, inter alia, received Rs.5,61,16,701/- for the periods 2008-09 and 2009-10 which was shown as contract billing under the heading "other income" for the services provided by the appellant towards 'site formation and clearance services' on behalf of M/s. Surendra Infrastructure Pvt. Ltd. at Port Blair, Andaman and Nicobar Islands, for which it appeared to the Revenue that the appellant was liable to pay Service Tax. 3.1 The above resulted in the issuance of Show Cause Notices dated 05.08.2010 and 06.03.2012 proposing to recover Service Tax of Rs.21,83,616/- [Rs.1,76,936/- (supply of tangible goods) + Rs.20,06,680/- (site formation and clearance)] and Rs.74,58,305/- [Rs.1,95,350/- (GTA service) + Rs.6,85,355/- (supply of tangible goods) + Rs.1,52,928/- (management, maintenance or repair service) +Rs.64,24,672/- (site formation and clearance)] respectively, inter alia alleging that the appellant had wilfully suppressed the value of fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same was relating to construction of roads at Diglipur site of Project Samudra of the Indian Navy; the said contract was awarded to M/s. Electronics Corporation of India Ltd. (ECIL), a Government of India enterprise, which in turn engaged M/s. Surendra Infrastructure Pvt. Ltd. ('SIPL' for short) for earth work, construction of road, construction of buildings and other related civil and electrical works, and the value of the said contract was Rs.7.76 crores. 3.4 It appears that M/s. SIPL sub-contracted the earth work and construction of roads up to the stage of blacktopping to the appellant and the estimated contract value was Rs.2.90 crores. The rate for excavation, inter-carting, self-cutting and dozing was finalized at Rs.63/- per m3 and the bill of quantity indicated an approximate quantity of Rs.2.50 lakhs m3. The scope of work included site formation and clearance of the dense forest area and formation of road in the cleared area from ground level to technical building, DF Antenna, ESM Antenna and staff quarters at the top, which resulted in making a service road for transporting the equipment to the GTS level and clearing the jungle in and around the GTS lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Advocate appearing for the appellant, submitted at the outset that the demand confirmed in the impugned orders is not sustainable mainly on the issue of limitation itself since there was no suppression of facts, etc., much less with an intention to evade payment of Service Tax, for the reason that, in the first place, the construction work carried out by the appellant in the capacity of a sub-contractor was for the Indian Navy, which fact could never be 'suppressed' and secondly, the appellant had believed in good faith that the construction work involved even constructing Kaccha Road for facilitating the movement of vehicles in the dense forest area, therefore, the same being site formation and clearance service in relation to construction of road as well, was eligible for exemption under Notification No. 17/2005 ibid. 6.2 Without prejudice to the above contention, he would also submit as under: - (i) On the same facts, the Joint Commissioner had also issued Show Cause Notice dated 05.08.2010 demanding Service Tax for the period 2008-09 based on audit objections. (ii) The second Show Cause Notice dated 06.03.2012 which thereafter culminated in the impugned Order-in-Origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Understanding (MoU), a copy of which is placed in the appeal papers, to emphasize that the scope of the MoU was for carrying out the 'earth work' part of the work at Diglipur, for development of station at Diglipur, as composite work and that therefore, the claims of the appellant as regards the construction of service road, kaccha road, etc., were only incidental to the contract. 7.2 He would also submit that the appellant had wilfully suppressed the receipt of the service amount of Rs.5,61,16,701/- for the periods 2008-09 and 2009-10 for providing site formation and clearance service, which attracted Service Tax and therefore, proviso to Section 73(1) of the Finance Act, 1994 was rightly invoked in the Show Cause Notice. 8. We have considered the rival contentions and we have also gone through the documents placed on record. 9. After hearing both sides, we find that the following issues are to be decided by us: - (1) Whether the appellant was entitled to the benefit of exemption under Notification No. 17/2005-S.T. dated 07.06.2005? (2) Whether the demand proposed and confirmed later, is barred by limitation? (3) Whether the tax liability on the amount claimed to have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Appeals), the appeal before the first appellate authority stood dismissed for non-compliance, which has given rise to this appeal. 11.1 Further, it appears from the acknowledgement in Form ST-4 that the first appeal was filed on 30.01.2012 and pending disposal of the above first appeal, the Revenue appears to have jumped the gun by issuing a second Show Cause Notice No. 14/2012 (C) dated 06.03.2012, which was issued by the Commissioner, Puducherry. 11.2 Paragraphs 10, 11 and 14 of the above Show Cause Notice record the following: - 10. In view of the above definitions, it appears that the warranty charges received by M/s. VIEPL for the services provided by them falls under the taxable service of "Management, Maintenance or Repair Service" and are liable to pay Service Tax on the same. The Service tax payable works out to Rs.1,52,928/- as detailed below. The same is liable to be recovered along with interest. Period Charges received Service Tax E. Cess S. Cess Total 2008-09 1237280 148474 2969 1485 152928 11. M/s. VIEPL had also received a service income of Rs.5,61,16,701/- for the periods 2008-09 and 2009-10 shown as contract billing under the hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in respect of the above Show Cause Notice, the Commissioner / Adjudicating Authority proceeded to pass the Order-in-Original which is impugned herein, in respect of Appeal No. ST/41600/2015, wherein he has not touched upon the issue in the Show Cause Notice dated 05.08.2010 issued by the Joint Commissioner which is earlier in point of time, on the very same audit objections which is also the basis for issuance of the second Show Cause Notice. 12. In the light of the above discussions, we find it pertinent to consider the allegation of wilful suppression of facts and whether the Revenue was justified in issuing the Show Cause Notices by invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 based on the very same audit objections, for the very same periods. 13.1 There cannot be any dispute that the first Show Cause Notice, which was issued based on the audit objections, did consider all the relevant facts and thus, the concerned authority of the Department was very much aware of the relevant facts. Hence, while issuing the second Show Cause Notice, the very same facts could not be held as 'suppression of facts' by the appellant as these facts wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the department. It was observed in para 14 as follows : "14. We have indicated above the facts which make it clear that the question whether M/s. Pharmachem Distributors was a related person has been the subject-matter of consideration of the Excise authorities at different stages, when the classification was filed, when the first show cause notice was issued in 1985 and also at the stage when the second and the third show cause notices were issued in 1988. At all these stages, the necessary material was before the authorities. They had then taken the view that M/s. Pharmachem Distributors was not a related person. If the authorities came to the conclusion subsequently that it was a related person, the same fact could not be treated as a suppression of fact on the part of the assessee so as to saddle with the liability of duty for the larger period by invoking proviso to Section 11A of the Act. So far as the assessee is concerned, it has all along been contending that they were not related persons, so, it cannot be said to be guilty of not filling up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant." 13.2.4 In view of clear observations of the Hon'ble Apex Court (supra), we are of the view that the above ruling squarely applies to the facts of the case on hand. 13.3 We also find that similar view was taken by various CESTAT Benches. 14. It is also a fact borne on record that other than the audit observations, no other material facts have been brought on record by the Revenue. Hence, the allegation of suppression of facts made by the Revenue should fail and therefore, the impugned orders cannot sustain. Discussion on merits: 15.1 Based on the facts discussed in the earlier part of this order, essentially, we find that the original contract was awarded by the Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is also exempt from the purview of Service Tax. 17.1 The appellant has claimed, rightly so, that it did construct roads as well as provide site formation and clearance, excavation and earth moving and demolition service and has thus, claimed the benefit of Notification No. 17/2005 ibid. 17.2 Notification No. 17/2005-S.T. dated 07.06.2005 reads thus: - " In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the site formation and clearance, excavation and earthmoving and demolition and such other similar activities, referred to in sub-clause (zzza) of clause (105) of section 65 of the Finance Act, provided to any person by any other person in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports or other ports, from the whole of service tax leviable thereon under section 66 of the said Finance Act. 2. This notification shall come into force on the 16th day of June, 2005." 17.3 After considering the activities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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