The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)allowed to submit documents as assesee failed to subnit the same due to covid -19 since quantification of service tax under work contract service without extending benefit of abatement.
M/s. Sivaparameshwari Engineering Construction & Co, the appellant had provided taxable services under the category of ‘Works Contract Services’ to PWD, Local bodies etc. These services involved construction of buildings for school, colleges, Court building, office buildings hospital etc.
The appellant had not obtained service tax registration and had not filed ST-3 returns. As per the provisions of Notification No. 06/2015- ST dated 20.03.2015, the construction services provided to Government departments, except in the case of construction services provided to historical monuments, archaeological site of remains of material importance, archaeological excavation or antiquity specified under the Ancient monuments and archaeological sites of Remains Act, 1958 (24 of 1958) are liable to service tax w.e.f. 01- 04-2015, for the contracts entered after 01.03.2015.
The appellant had entered into contracts with the Government Department and other local bodies for construction of buildings after 01.03.2015, executed works and collected the amount for the works executed. They failed to discharge the service tax on the consideration received. Investigation was intiated. Documents were verified and statements were recorded.
M/S SECC, a partnership firm having Shri P. Senthilkumar (himself), Smt. P Parmeswari, Shri. Ramasamy Gounder, Smt. B. Sampoornam, Smt.S.Nandhini, as the partners of the firm. They had not taken service tax registration and are registered only under GST vide GSTIN 33AAUFS3608N1ZM.
They were engaged in providing services under the category of works contract services to PWD and other Government Departments of Tamil Nadu; the services provided involves construction of buildings to schools, colleges, court building, office buildings and hospitals; they have not done any work to private parties;
On scrutiny and analysis of documents and statements it was seen that the appellant has not discharged their Service Tax liability under works contract services. Show Cause Notice dated 24.12.2020 was issued to the appellant proposing to demand Service tax along with interest and for imposing penalties.
After due process of law, the original authority confirmed the demand of Rs.5,19,81,818/- along with interest and imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal.
Shri S. Durairaj appeared and submitted that the appellants provided works contract services to various Government departments namely, PWD buildings (C&M) Division, Namakkal, Erode, Tirupur and Coimbatore, Tamil Nadu Livestock Development Agency, Bharathiar University, PWD Buildings at Udhagamandalam, Madukarai Special Grade Town Panchayat, Tamil Nadu Agricultural University at Coimbatore, Technical Education Division and Postal Division, Chennai; Investigation was initiated on 29.11.2018 and the appellant was issued summons.
Due to the Covid-19 pandemic, the appellant could not furnish certain vital documents at the time of investigation and adjudication proceedings. The Department has classified the service under works contract services,the valuation of works contract service has to be done under Section 67 read with Rule 2A of the Service Tax (Determination of Value) Rules, 2006.
Shri Rudra Pratap Singh,Authorized Representative argued for the Department. It was submitted by him that the appellant had sufficient opportunity to furnish evidence and also to reply to the Show Cause Notice and therefore, the documents produced belatedly cannot be accepted or relied.
It was clarified in the letter issued by the Public Works Department that the amount shown under ‘Service Tax’ heading has to be read as TDS on Sales Tax (VAT). Such letters have been issued by other Government departments also. The impugned order does not seem to have considered all these aspects.
The appellant could not obtain such documents due to the outbreak of the Covid-19 pandemic. They have now produced filed miscellaneous application, and produced documents. A two member bench comprising of Sulekha Beevi C.S., Member (J) and Vasa Seshagiri Rao ,Member (T) held that the appellant has to be given an opportunity to put their defence on the basis of the documents furnished by them.
While allowing the appeal, the CESTAT set aside the impugned order and remanded the matter to the adjudicating authority for de novo adjudication.
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