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TMI Blog2024 (4) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... t w.e.f. 01.07.2012 by treating the said construction service as a declared service under section 66E of the Finance Act. The order also seeks to confirm the demand of service tax on the gross value of taxable services under 'renting of immovable property' defined under section 65(90a) and made taxable under section 65(105)(zzzz) of the Finance Act. The order also seeks to recover interest and imposes penalty. 2. An Agreement dated 03.02.2009 was entered into between Engineering Projects (l) Ltd. [EPI] and the appellant for construction of the Metrology (Standard) Block for NPL. The total contract price for the entire scope of the contract was stated to be Rs. 35,75,85,192.27/-. The department formed an opinion from the scope of work that the appellant provided a taxable service. The Department also formed an opinion that the Exemption Notification No. 25/2012-ST dated 20.06.2012 [the Exemption Notification] would not be applicable as the appellant was not a 'governmental authority'. The department also formed an opinion from the scrutiny of the balance sheets that the appellant was receiving income from 'renting of immovable property'. 3. As the appellant had not paid service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scientific and technical consultancy services on payment basis. It was also registered with the service tax department for providing scientific and technical consultancy services. The Commissioner, therefore, found as a fact that NPL was a commercial concern/organization established by Council of Scientific and Industrial Research. Thus, the construction services provided by the appellant to NPL upto 30.06.2012 qualified as taxable service under CICS. The Commissioner also found that w.e.f. 01.07.2012, the service rendered by the appellant would be a 'declared service' under section 66E of the Finance Act. The Commissioner, thereafter, examined whether the NPL would be a 'governmental authority' and hence exempted from payment of service tax under the Exemption Notification. In this connection, the Commissioner held that NPL was not set up by an Act of Parliament or a State Legislature and, therefore, was not a 'governmental authority' under the Exemption Notification. 7. In respect of the second issue the Commissioner found that the amount of rent received from immovable property prior to merger of the appellant with M/s. N.N. and Company could not be assessed in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .4.8 xxxxxxx. However, though the assessee has failed to produce records to indicate that they had opted for the Compositin scheme before 30.11.2011, I observe taht the assessee cannot be denied a substantial right for procedural lapses. Accordingly, I allow benefit of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 as amended to the assessee. Thus, the assessee is liable to pay Service Tax on the taxable services provided by them @4.12% (including cesses) from October 2011 to March 2012 and @ 4.944% (including cesses) for the period April 2012 to June 2012." 9. The Commissioner, thereafter, examined whether the extended period of limitation under the proviso to section 73(1) of the Finance Act could have been invoked in respect of the first show cause notice dated 21.04.2014. The finding recorded by the Commissioner on this aspect is as follows: "6.5.2 I find that with effect from 16.07.2001, due to the changes brought in the Finance Act, 2001, self-assessment of the Service Tax payable under the provisions of Section 70 of the Act was introduced, wherein the Superintendent of Central Excise is empowered only to verify the correctness of the Retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever made known about the difficulties in understanding the levy and payment of Service Tax regarding the impugned services. Further, it was the self-assessment procedure by virtue of which the assessee was required to assess the taxability of impugned services vis-à-vis the legal provisions. The evasion of Service Tax by the assessee, detected later by the department, does not automatically construe to be arising out of bonafide element. All this clearly points out the intention of the assessee not to discharge their Service Tax liability. 6.5.6 In view of the above discussions, I hold that the assessee has wilfully and deliberately suppressed the facts regarding taxable values from the Department so as to avoid their liability towards payment of due amount of Service Tax and accordingly the extended period as provided in proviso to Section 73 (1) of the Act has rightly been invoked in the SCN dated 18.04.2014 and due Service Tax is recoverable from the assessee by applying provisions of section 73(2) of the Finance Act, 1994." (emphasis supplied) 10. Shri Rishabh Jain, learned counsel for the appellant made the following submissions: (i) Construction of Metrology B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned authorised representative submitted that the appellant is not correct in contending that the construction of metrological Building for NPL was for non commercial purposes and so the Commissioner was justified in classifying the service under CICS upto 30.06.2012 and, thereafter, as a declared service under section 66E of the Finance Act. Leaned authorised representative also submitted that the appellant was correctly denied the benefit of the Exemption Notification as it was not a 'governmental authority' as defined under the Exemption Notification. The invocation of the extended period of limitation for the first show cause notice was also supported by the learned authorised representative appearing for the department. 12. The submissions advanced by the learned counsel for the appellant and the learned authorised representative appearing for the department have been considered. 13. The details of the amount of duty and penalty confirmed in the impugned order are as follows: Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 ST demand under CICS 88,82,939/- 27,66,120/- 9,43,564/- ST demand under Renting 32,630/- 12,948/- 12,948/- Penalty under section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een established under any Act of Parliament or a State Legislature. Learned counsel for the appellant has also not been able to satisfy that NPL is a non commercial organisation. The Commissioner has given good and cogent reasons for holding that NPL is a commercial concern/organisation. 18. There is, however, force in the contention of learned counsel for the appellant that the extended period of limitation could not have been invoked in regard to the first show cause notice dated 21.04.2014. 19. In the show cause notice, all that was alleged for invoking the extended period of limitation is: "21. Whereas it further appears that the aforementioned facts of non-payment of service tax, on taxable services wrongly claimed as exempted services were deliberately and intentionally concealed by the assessee from the department with the intent to evade the payment of due service tax and they did not file prescribed ST-3 returns accordingly. Thus, by not disclosing the entire facts to the department, the said value has escaped the assessment for Service Tax liability, resulting into contravention of various provisions of the said Act and the said Rules aforesaid with intent to eva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .)] also examined at length the issue relating to the extended period of limitation under the proviso to section 73 (1) of the Finance Act and held as follows: "27. Therefore, it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word "suppression' in the proviso to Section 11A(1) of the Excise Act has to be read in the context of other words in the proviso, i.e. "fraud, collusion, wilful misstatement". As explained in Uniworth (supra), "misstatement or suppression of facts" does not mean any omission. It must be deliberate. In other words, there must be deliberate suppression of information for the purpose of evading of payment of duty. It connotes a positive act of the assessee to avoid excise duty. xxxxxxxx. Thus, invocation of the extended limitation period under the proviso to Section 73(1) does not refer to a scenario where there is a mere omission or mere failure to pay duty or take out a license without the presence of such intention." xxxxxxxxxx. The Revenue has not been able to prove an intention on the part of the Appellant to avoid tax by suppression of mention facts. In fact it is clear that the Appellant d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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