The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the work of composite nature involving site formation is taxable under Finance Act, 1994, and hence no service tax exemption.
Based on the investigations conducted by the department, the Additional Director General (ADG), DGCEI, Chennai issued Show Cause Notice dated 9.10.2015 proposing to demand service tax from the appellant. After due process of law, the adjudicating authority confirmed the service tax of Rs.8,74,99,061/- with interest under the head ‘Mining Service’.
Rs.60,54,133/- with interest for the services ‘Site Formation, Clearance, Excavation, Earth Moving and Demolition Service’ and Rs.4,06,83,917/- with interest for ‘Supply of tangible goods service’. The adjudicating authority also imposed penalty of Rs.13,42,37,111/- on the appellant under section 78 of the Act and under section 77(1)(a) and 77(2) of the Finance Act 1994.
The appellant can make a claim for exemption under the said provision of the notification if taxable services were provided by them to a Governmental Authority etc. Services provided to NAPC, L&T, GVR etc. will not get the benefit of this exemption as the taxable service is not provided by the appellant to Government, a local authority or a governmental authority nor are the principal activities meant for construction of roads etc.
A Two-Member Bench of the Authority comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “In the case of vehicles supplied without an agreement / contract including those related to the supply of tangible goods / vehicles to TAMIN the effective control of the vehicles was with the appellant. Tax for the lease of the vehicles will have to discharged as a taxable service of ‘Supply of tangible goods service’ as defined in Section 65 (105) [(zzzzj) has been rendered. Therefore, the matter is remanded to the Original Authority only for the purpose of quantifying and intimating the correct demand of duty and interest to the appellant.”
“The activities hence get covered under the definition of taxable service as per Section 65(105)(zzza) of FA 1994 and are liable to discharge duty accordingly without the benefit of exemption under Sl. No. 13 of Notification 25/2012 dated 20.6.2012” the Bench concluded.
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