POPULAR CONSTRUCTIONS Vs. COMMISSIONER OF C. EX., BELGAUM

JUDGEMENT

(1.) THE adjudicating authority has demanded service tax and education cess totalling to Rs. 73,77,685/ - from the appellant under the Head Business Auxiliary Service (BAS) for the period from December 2005 to March 2007 in adjudication of a show -cause notice which was issued in January 2011 invoking the extended period of limitation. It has also imposed penalties on the appellant. The present application seeks waiver and stay in respect of these dues adjudged against the appellant.

(2.) AFTER examining the records and hearing both sides, we note that the demand is on the activity of mining and grading of iron ore undertaken by the appellant during the aforesaid period. We further note that, in respect of this very activity, from 1 -6 -2007, the appellant has been paying service tax under the Head, Mining Service after obtaining requisite registration from the department. We, further, note that the above show -cause notice was issued in the wake of audit conducted by the auditors of the department in February 2008. The auditors had taken a view that the appellant had to pay service tax under the Head site formation. However, in the show -cause notice, the department took the stand that the noticee must pay service tax under BAS. It is the submission of the learned counsel that these circumstances would bring out the confusion which prevailed in the department as regards the tax liability of the appellant for the period of dispute. In such circumstances, the extended period of limitation could not have been invoked by the department. We have heard the learned Additional Commissioner (A.R.) also, who has submitted that, there being no estoppel in tax matters, nothing stood in the way of the department demanding service tax under BAS for the earlier period from the appellant in respect of the same activity. We are not impressed with this submission. A given activity can be classified only under one Head of taxable service and such classification of taxable service is a part of the scheme of the levy. Further, we have found prima facie case for the appellant inasmuch as they have been paying service tax in respect of the same activity from 1 -6 -2007 (the date with effect from which mining service became taxable) under the Head, Mining Service after obtaining the requisite registration from the department. Apparently Mining Service has been accepted as the appropriate service rendered by the appellant. The fact that they have been paying service tax under this category ever since it became a taxable service under this category shows that the appellant did not want to hide anything from the department or to evade tax. Prima facie, the extended period of limitation was invoked without any basis.

(3.) THE appellant has also claimed legitimate support from the decision in the case of CCE, Hyderabad v. Vijay Leasing Company [2011 (22) S.T.R. 553 (Tri -Bang.)] wherein a similar activity was held to constitute Mining Service.