CESTAT upholds Service Tax Demand on 'Technical Testing and Analysis service' and 'Consulting Engineer Service' [Read Order]

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) upheld the service tax demand on 'Technical Testing and Analysis Service' and 'Consulting Engineer Service'.

In this case, the appellant, M/s. N.K. Constructions has been engaged in the construction of factory sheds and other industrial constructions at industrial units in and around Guwahati. A show cause notice ( SCN ) dated 12.04.2013 was sent to the appellant demanding a service tax of Rs. 2,20,40,827 under the category of ‘commercial or industrial construction service’ for the period from 01.10.2007 to 30.09.2012 after the investigation by the officers of the Anti-Evasion Unit of the Guwahati Commissionerate.

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In the SCN, it was alleged that the appellant provided 'commercial or industrial construction service' to clients without supplying any materials, making them ineligible for the benefit of Notification No. 01/2006-S.T. dated 01.03.2006. It also stated to deny the notification’s benefits and demanded service tax under 'Technical Testing and Analysis service' and 'Consulting Engineer Service.'

The Commissioner confirmed the demand for the service tax of Rs. 2,20,40,827 and also confirmed the demand for service tax under the categories of 'Technical Testing and Analysis Service and 'Consulting Engineer Service'. He also imposed an equal amount of tax confirmed as a penalty under Section 78 of the Finance Act, 1994, and Rs. 10,000 as a penalty under Section 77 of the Finance Act.

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The appellant approached the CESTAT for relief.

It was submitted by the appellant that the work orders received by them clearly indicate that all the commercial or industrial construction works were carried out by them along with materials.

The appellant did not contest the service tax demand under 'Technical Testing and Analysis Service' and 'Consulting Engineer Service,' but the appellant requested the penalties imposed in the impugned order to be set aside.

The counsel on behalf of the revenue reiterated the findings in the impugned order.

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The CESTAT bench, comprising of R. Muralidhar ( Member Judicial ) and K. Anpazhakan ( Member Technical ) upheld the demand for service tax along with interest confirmed in the impugned order under the categories of 'Technical Testing and Analysis Service' and 'Consulting Engineer Service'. However, no penalty was imposed on the appellant with respect to these confirmed demands, as there was no evidence brought on record to establish suppression of facts with the intention to evade payment of tax in respect of these demands.

To Read the full text of the Order CLICK HERE

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