CESTAT upholds Demand of Service Tax along with Interest on ‘Consulting Engineer Service’ due to failure in payment of Tax [Read Order]

The Bangalore bench of the Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) upheld the demand for service tax along with interest on ‘Consulting Engineer Service’ due to failure in payment of tax.

M/s. M. Srinagesh Hegde, the appellant is engaged in the building of commercial or industrial complexes and also provides consulting engineering services.  A show-cause notice was issued to the appellant alleging that even though they have provided taxable service under the category of ‘Commercial or Industrial Construction Service’ and ‘Consulting Engineer Service’ during the relevant period from 01.04.2002 to 31.03.2007 but failed to discharge service tax. 

On adjudication, the demand was confirmed with interest and penalty.  On appeal, the Commissioner ( Appeals ) partly allowed their appeal by upholding the demand of Rs.1,15,651/- towards ‘Consulting Engineer service’ and Rs.15,00,040/- towards ‘Commercial or Industrial Construction service’ with interest, however, dropped the penalty imposed under various provisions of the Finance Act, 1994.

It was observed that the service tax has been confirmed against the appellants for rendering ‘Consulting Engineer Service’ and also ‘Commercial or Industrial Construction Service’.  The appellant has not disputed before us the levy of service tax on ‘Consulting Engineer Service’; however, they have contested the confirmation of demand under the

The proprietor categorically stated in his statement dated 03.07.2007 that they are rendering construction service, which includes supply of materials like cement, sand, jally, bricks etc., and free supply of materials like ready-mix concrete ( RMC ) and steel required for the construction of hotels entrusted by M/s. Motels & Infrastructure India Pvt.  

A two-member bench comprising Dr. D.M. Misra, Member ( Judicial ) and Mr. Pullela Nageswara Rao, Member ( Technical ) upheld the impugned order to the extent of confirmation of demand of Rs.1,15,651/- with interest under ‘Consulting Engineer Service’ and modified by setting aside the demand of Rs.15,00,040/- confirmed against ‘Commercial or Industrial Construction.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates