Service Tax Demand on Fabrication works for Indian Railway without any corroborative Evidence : CESTAT Directs Re-adjudication [Read Order]

Service Tax - Service Tax Demand - Fabrication - Fabrication works - Indian Railway - Service Tax Demand on Fabrication works for Indian Railway -CESTAT - taxscan

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication to the adjudicating authority for the imposition of service tax demand on fabrication works for Indian Railway without any corroborative evidence. 

Calcutta Springs Ltd, the appellant assessee was engaged in fabrication work for Indian Railways since the year 2000 and they were treating the job work as manufacturing activity and paying Excise Duty on the same later the court held that such activity does not amount to manufacture and hence no Excise Duty was required to be paid. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the Service Tax Demand on the activities done by the assessee. 

S. P. Siddhanta, the counsel for the assessee contended that the Audit Team pointed out that Service Tax is required to be paid and the Show Cause Notice should have been issued within one year from the date of such knowledge by the Audit Team. 

However, the Show Cause Notice was issued only on 20/07/2009, thus the normal period is required to be taken as 01/04/2008 to 31/12/2008. 

Chattopadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that the fabrication work amounts to service and accordingly, directed that the Service Tax under the category of ‘Business Auxiliary Services’ was required to be paid. 

The Bench observed that there was no evidence brought to the effect that the assessee had acted deliberately to evade payment of Service Tax. 

The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) remanded the matter back to the adjudicating authority to determine net Service tax payable during the period 01/04/2008 to 31/12/2008. 

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