AMBALAL CHAUHAN Vs. COMMISSIONER

JUDGEMENT

(1.) Feeling aggrieved by the demand of service tax and education cess raised by the revenue department, the appellant has moved this court in the appellate jurisdiction and prayed for setting aside of the impugned orders and the demand dated 13.3.2012.

(2.) The appellant is a registered proprietary concern engaged in the business of providing services, such as commercial and industrial construction service, which is specified as taxable service under Section 105 (ZZQ) of the Finance Act, 1994 (henceforth 'the Act of 1994'). Service tax registration was obtained by the appellant on 15.11.2006. During the currency of service tax registration, the appellant was engaged in commercial construction activities with M/s Ind Synergy Ltd.,Raigarh (for short 'the ISL') and therefore raised bills in the year 2005-06, 2006-07 and 2007-08 for payment towards the work performed by appellant. On the basis of intelligence gathered by the Revenue that ISL had engaged the appellant for the work of site preparation, land development, civil and structural construction, the information was sought from the ISL, who vide letter dated 9.6.2008 provided the information sought for along with the list of contractors to whom they awarded contracts and year-wise details of payments made by them. On receipt of such information, the Superintendent, Central Excise, Range - Service Tax, Bilaspur called upon the appellant to furnish information with respect bills raised on the ISL from beginning, details of amount received and details of service tax paid. When the appellant did not furnish the information as sought for, the ISL was directed to supply the same, but the ISL also not furnished any detail/information despite repeated request letters. Thereafter, copies of ledgers of the appellant, which were maintained by the ISL, were procured and forwarded by the Superintendent, Central Excise, Range-Raigarh to the Superintendent, Central Excise, Range-Service Tax, Bilaspur. From the material available therein, it was revealed to the Revenue that nature of services rendered by appellant are classifiable and taxable under sub- clause (zzq) of Section 105 of the Act of 1994, but the appellant has not furnished any information, document and also not declared the value of taxable service in ST-3 return filed by him. On 18.10.2010 a show cause notice was issued by the Additional Commissioner, Customs and Central Excise, Raipur to appellant calling upon him to explain as to why service tax of Rs.6,92,606/- and education cess amounting to Rs.13,534/- should not be demanded and recovered from appellant.

(3.) Appellant submitted reply to the said show-cause notice stating that the appellant had not provided any service classifiable and taxable under the Act of 1994. The contract entered between the appellant and the ISL is a composite contract. It was also stated that earlier the appellant was registered with Service Tax Department, but subsequently the appellant surrendered its service tax registration on 16.1.2009. It was also stated that while assessing tax value in the show- cause notice, the Revenue erred in not considering that the appellant is entitled for abatement of 67% on value available vide Notification No.18/2005/ST dated 7.6.2005. Thus, the appellant prayed for dropping of proceeding/notice issued.