construction for Govt Depts & utilised for non-commercial activities are exempted from Service tax
The assessee carried out construction services for Government of Gujarat and its undertakings and constructed Engineering & Ayurveda Colleges,Public utility like Adalaj Vav, vicinity of Sun Temple Modera, Police Quarters etc.
The department disputed that the construction carried out by the assessee will be works contract and service tax is payable accordingly.There was service tax demand of Rs 10.77 crores and another Rs 10.77 crores as penalty .
The claim of the assessee was that all such construction are non commercial in nature .Mr Anand Mishra,Advocate appeared in Honourable CESTAT and got unconditional stay .
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,West Zonal Bench, Ahmedabad
Application No. : ST/stay/13029/2014
Appeal No. : ST/11877/2014-DB
Arising out of : OIO-AHM-EXCUS-003-COM-055-13-14
Passed by : Commissioner of Central Excise-AHMEDABAD-III
Appellant (s) : M/s Vidhata Associates
Represented by : Shri Anand Mishra (Adv.)
Shri Bhavesh T Patel (CA)
Respondent (s) : Commissioner of Central Excise- AHMEDABAD-III
Represented by : Shri K Shivkumar (AR)
Mr. M.V. Ravindran, Hon'ble Member (Judicial)
Mr. H.K. Thakur, Hon ble Member (Technical)
Date of Hearing / Decision : 17/11/2014
ORDER No. M/14955/2014 dtd 17/11/2014
Per : Mr. M.V. Ravindran;
This stay petition is filed for the waiver of pre-deposit of an amount confirmed as Service Tax liability, interest thereof and penalties imposed. Heard both sides and perused records.
2. On perusal of the records, it transpires that the Adjudicating Authority has confirmed the demand raised on the appellant under the category of works contract Services. Ld Counsel brings to our notice that the appellant had during the relevant period 2005-06, 2007-08 and 2011-12 have the considered construction activities undertaken by them as exempted under the category of construction services and filed the returns by them with the authorities during the relevant period. It is his submission that all such returns were filed during the relevant period in time and no objections were raised. He would also draw our attention to the fact that the Revenues claim of services being rendered at woks contract is also incorrect as all these construction activities which has been undertaken by the appellant were in respect of Govt of Gujarat various projects which were non-commercial purpose. They also submit that they are covered by the CBEC Cir No 80/10/2004-ST 17/9/2004 and more than specifically Para 13.2. Ld Dept Rep. on the other hand would submit that the activity of construction executed by the appellant would fall under works contract as they have procured materials themselves and executed the contracts. It is the submission works contract does not envisage any exemption for the govt building in the case of construction services.
3. We find that the appellant has made out the case for complete waiver of the amounts involved for more than one reason.
4. Firstly, on perusal of service tax return, we find that the appellant has been declaring to the authorities an amount which has been received by them towards the exempted services; no question were raised by the Dept. It would be prima facie, safe to presume that the amounts received by the appellant were towards exempted services.
5. Secondly, on perusal of the show cause notice, we find that the appellant has been rendering services of construction to the various Govt Depts utilised for non-commercial activities. Prima-facie, we are of the view that appellant has made out the case for complete waiver of the pre-deposit of the amount involved. Accordingly, application for waiver of pre-deposit amounts involved is allowed and recovery thereof stayed till the disposal of appeal.
(Dictated and pronounced in the Court)
(H.K. Thakur) (M.V. Ravindran)
Member (Technical) Member (Judicial)