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TMI Blog2024 (7) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... mpose a penalty of Rs 36,44,549.00 (Rupees Thirty Six Lakh Forty Four Thousand Five Hundred and Forty Nine only) upon the noticee under Section 78 of the Finance Act, 1994; 4. I confirm the demand of late fee amounting to Rs 2,20,000 (Rupees Two Lakh Twenty Thousand only) from the noticee under Rule 7C of the Service Tax Rules, 1994, 5. I also impose a penalty of Rs 20,000.00 (Rupees Twenty Thousand only) upon the noticee under Section 77(1)(a), 77(1)(b) and 77 (2) of the Finance Act, 1994 2.1 Appellant is registered with and is providing/ receiving services under taxable category of "Work Contract Services" and "Legal Consultancy Services" 2.2 Investigations undertaken revealed that appellant had not paid service tax on the services provided by them to M/s Amar Nath Ashram Trust, UP State Construction and Infrastructure Development Corporation Ltd, Bulandshahar, Thakur Giriraj Ji Maharaj Trust, Govardhan, Jal Nigam, Mathura, Saint Paul School, Mathura, M/s Zillion Infra Projects, Delhi, M/s Ginni Filaments Ltd., & M/s PACCFED (UP Processing and Construction Cooperative Federation Ltd.). A show cause notice dated 21.10.2015 was thus issued to them asking them to show cause as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services provided by them to the M/s Amar Nath Trust and also M/s Ginni Filament are work contract services on which service tax liability is to be computed on 40% of the Gross Amount charged. Impugned order holds these services as repair and maintenance and computed service tax on 70% of gross value. * They have deposited the service tax payable on the services provided to M/s Ginni Filament by computing the tax payable on 40 % of gross amount. * Services provided by them to M/s Madhucon Projects are in relation to construction of toll Plaza at Jaipur Highway. These services being in relation to road are excluded from the definition of work contract services as defined under Section 65 (105) (zzzza) of the Finance Act, 1994. Reliance on * Rajendra Singh Bhamboo [2019 (22) GSTL 278 (T-Del)] * Jagdish Prasad Agarwal [2017 (3) GSTL 455 (t-Del)] * IDAA Infrastructure Pvt Ltd. [2014 (34) STR 87 (T-Mum)] * Roller Centrevs [2013 (31) STR 293 (T-Ahmd)] * Circular No 147/16/2011-ST dated 21.10.2011 clarified that in case the services provided by the sub contractor to the main contractor were independently classifiable as "work contract services" then they will get the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 and meant predominantly for religious use by general public are exempted from payment, of service tax. Here the noticee has constructed college/ hostel building and other misc. construction work, thus the services provided by Noticee to Amar Nath Ashram Trust are leviable to service tax. As per Point (i) of second proviso to Rule 3 of the Point of Taxation Rules, 2011, in case of continuous supply of service where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of contract, the date of completion of each such event shall be deemed to be the date of completion of provision of service. Accordingly the taxable value of such services provided by the noticee on or after 01.07.2012 is calculated as per Form 26AS of noticee as under: TABLE-A Details of Work Contract Service provided by Noticee to Amar Nath Ashram Trust, Mathura on or after 01.07.2012 (Amount in Rs.) Sl. No. Period/ Financial Year Service provided in respect of construction of single residential unit (Non-Taxable) Service provided for construction of College, Hostel & other Misc. Construction (Taxable) 1 2012-13 (From 01.07.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile the required periodical returns in time as such the noticee is liable to penal action under Rule 7C of the Service Tax Rules, 1994 as well as Section 77 of the Act ibid. 30.1 I find that there are evidences on records which show that the noticee had knowingly and willfully suppressed material facts. The noticee failed to bring the relevant facts as outlined above to the notice of the Department. If the enquiry would not have been initiated against the noticee, this evasion of Service Tax by the noticee has remained un-noticed and the noticee would have succeeded in evading the payment of service tax. Therefore, the noticee, with intent to evade payment of Service Tax, had willfully suppressed the facts from the department and contravened various provisions of the Act and the Rules made there under. Hence, the noticee is liable for penal action under Section 78 of the Act. 31. On the basis of above discussion, the taxability on services provided by the noticee (as detailed in Table-B) and service tax liability thereon (as detailed in Table-C) comes as under Table A (Amount in Rs.) F.Y. 2010-11 1 Amar Nath Ashram Trust, Mathura 8601586 NON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;(Determination of Value) Rules. 200,] RATE OF SERVICE TAX SERVICE TAX PAYABLE By Receiver By Provider F.Y. 2010-11 1 Ginni Filaments Ltd 2022883 2022883.00 4.12% 0 83342.78 2 Madhucon Projects Ltd 820699 820699.00 4.12% 0 33812.80 Total 2843582 2843582.00 0 117155.58 F.Y. 2011-12 1 Nil 0 0 4.12% 0 0 F Y 2012-13 Ginni Filaments Ltd. (Amount received after 01.07.2012) 8570646 5999452.20 12.36% 370766.15 370766.15 Amar Nath Ashram Trust, Mathura (Amount received after 01.07.2012) 13939755 9757828.50 12.36% 0.00 1206067.60 TOTAL 22510401 15757280.70 370766.15 1576833.75 F Y 2013-14 1 Ginni Filaments Ltd 902266 631586.20 12.36% 39032.03 39032.03 2 Ginni Filaments Ltd. 1935082 1354557.40 12.36% 83711.65 83711.65 3 Amar Nath Ashram Trust, Mathura 12938754 9057127.80 12.36% 0.00 1119461.00 Total 15776102 11043271.40 122743.67 1242204.67 F Y 2014-15 1 Ginni Filaments Ltd 3359598 2351718. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls, guest house, shed, drainage within new/ existing structures, electrical works like piping, installation of electric sockets, wiring etc in the new/ existing structures" under the contracts entered between the noticee and deductor of the TDS (in other words recipient of services) In view of the above and on taking cognizance of the statements dated 22.09.2015 of Shri Rajeev Agarwal partner of M/s Build Age Construction, Mathura, it appears that the activities undertaken by the noticee are in relation to construction repair, renovation or maintenance of new/ existing structures, drainage etc., hence appears classifiable under the category of the service "Work Contract". And the noticee is liable to pay Service Tax due there on." The argument advanced by the appellant that the demand has been confirmed against them by treating the services under the category of repair and maintenance services cannot thus be justified and needs to be rejected. 4.4 In respect of demand made in respect of the services provided to M/s Madhucon Projects from te impugned order it is evident that the demand has been confirmed for the reasn that appellant were unable to substantiate their claim that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and appellant has not challenged the rejection at the time of argument of the appeal. The demand made in respect of the services provided by the appellant to the said trust have been held to be exempted where the services were for charitable causes in terms of the said notification under that entry. We do not find any merits in the submissions made by the appellant in this respect. 4.6 The decisions relied upon by the appellant in case of,- * Kanwarji Construction Co [2017 (12) TMI 1379 - CESTAT New Delhi * o Ratan Das Gupta & Co [2017 (3) GSTL 247 (T-Del)] * Anand Construction & Co [2013 (32) STR 451 (T-Del)] Do not support the case of the appellant as these decisions are rendered in the pre negative list era and the services were found not to be taxable under the definition f services as it existed then. However with effect froct from 1st July 2012, these services are classified under the category of work contract services and the benefit of exemption under Sl No 9 of the Notification No 25/2012-ST is not admissible to them. None of these decisions have decided the issue in post negative list era. 4.6 Appellants did not challenged the demand made in respect of the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an exhaustive argument before us on the question whether a penalty imposed under Section 271(1)(a) of the Act involves the element of mens rea and in support of his submission that it does he has placed before us several cases decided by this Court and the High Courts in order to demonstrate that the proceedings by way of penalty under Section 271(1)(a) of the Act are quasi criminal in nature and that, therefore, the element of mens rea is a mandatory requirement before a penalty can be imposed under Section 271(1)(a). We are relieved of the necessity of referring to all those decisions. Indeed, many of them were considered by the High Court and are referred to in the judgment under appeal. It is sufficient for us to refer to Section 271(1)(a), which provides that a penalty may be imposed if the Income Tax Officer is satisfied that any person has without reasonable cause failed to furnish the return of total income, and to Section 276C which provides that if a person 16illful16y fails to furnish in due time the return of income required under Section 139(1), he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine. It is clear that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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