ADOR FONTECH LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) HEARD both sides. The appellants filed this appeal against the adjudication order passed by the Commissioner of Central Excise, Nagpur, whereby a demand of Rs. 81,02,717 is confirmed with interest and penalties were imposed on the ground that the appellants are providing maintenance and repair service and while discharging the service tax, the appellants were not taking into consideration the value of material and consumables.

(2.) PROCEEDINGS were initiated by issuing a show -cause notice dated October 7, 2008 demanding service tax for the period July 2003 to March 2008. The adjudicating authority confirmed the demand and imposed penalties.

(3.) THE appellants also submitted that the major portion of the demand is time -barred. Show -cause notice was issued on October 7, 2008 for the period July 2003 to March 2008. The contention is that in the year 2005 the Revenue raised certain queries and in reply to that, the appellants vide letter dated October 25, 2005 explained their position regarding payment of service tax on the 20 per cent of the value of the contract and payment of VAT of 80 per cent of the value of the contract. The appellants also requested the Revenue for guidance. Subsequent to this, the audit was conducted and vide audit report dated December 16, 2006, after taking into consideration the practice adopted by the appellants regarding payment of 80 per cent of VAT on the value of material and consumables, the auditor was of the opinion that in some cases the value of material and consumables is less than 80 per cent hence the appellants were liable to pay service tax on the differential value. In pursuance to the audit the appellants paid an amount of Rs. 1,23,757. The contention is that as the was aware of the practice adopted by the appellants and there is nothing on record to show that the appellants concealed or suppressed the material facts from the Revenue hence the allegation of suppression with intent to evade payment of duty is not sustainable.