ST - If notification No. 1/2006-ST is denied, appellants would be clearly entitled to CENVAT credit irrespective of fact that they have not claimed it earlier: CESTAT
By TIOL News Service
MUMABI, JULY 19, 2017: AGGRIEVED by the confirmation of service tax demand and imposition of penalty, the appellant is before Tribunal.
It is submitted that they are engaged in providing 'Commercial or Industrial Construction Services' and 'Business Auxiliary Service' and provided finishing services to sports stadium owned by Government of Maharashtra, Shri Sathya Sai Charitable Trust, and Delhi Development Authority.
The appellants were availing benefit of Notification No. 1/2006-ST for the activity of laying of synthetic/wooden flooring in various sports stadiums. Revenue alleged that the benefit of notification 1/2006-ST is not applicable in case of service providers providing only completion and finishing services; that if the benefit is denied they would be entitled to claim CENVAT Credit of the materials used during provision of the service and only a very small quantum of demand would survive. However, the Commissioner denied this benefit on the ground that the appellant are also engaged in trading activities and separate accounts have not been maintained.
It is further submitted that the demand in respect of the work done at Shiv Chhatrapati Stadium at Balewadi Sports Complex, Pune for Common Wealth Youth Games, 2008, rendered on behalf of M/s. B.G. Shirke Construction, was held not to be taxable under 'Commercial and Industrial Construction Service'. [Ref. Circular No. 80/10/2004-ST and decision in Shirke Construction Technology Pvt. Ltd. - 2013-TIOL-1424-CESTAT-MUM, Anand Construction Co. - 2013-TIOL-238-CESTAT-MUM and S M Sai Construction - 2016-TIOL-416-CESTAT-MUM.]
The appellant also raised the point of the demand being hit by limitation in view of the letter dt. 9.3.2009 issued by Directorate of Sports and Youth Services, Maharashtra State and the letter of Shri Sathya Sai Health and Education Trust dt. 5.10.2007 stating that there will be no service tax liability in view of the Circular No. 80/10/2004-ST dt. 17.9.2004.
The AR supported the impugned order.
The Bench noted that the following two issues need consideration and gave its findings thereon -
i) Whether the benefit of Cenvat Credit can be extended to the appellant in case they are denied the benefit of Notification No. 1/2006-ST.
++ The appellants have produced detailed accounts running into 100 pages before Tribunal. The accounts appear to be quite elaborate and detailed. In the event that the benefit of notification No. 1/2006-ST is denied, the appellants would be clearly entitled to the cenvat credit irrespective of the fact that they have not claimed it earlier while claiming benefit of Notification No. 1/2006-ST. The demand confirmed on this is, therefore, set aside and matter remanded to the original adjudicating authority to examine the detailed account submitted by the appellant and to come at the conclusion regarding the cenvat credit available to the appellant. The fact that the appellants are trading should not be held against the appellant as that cannot be the reason for denying cenvat credit otherwise due.
ii) Whether they are liable to service tax in respect of services provided to Shri Sathya Sai Health and Education Trust, Government of Maharashtra in respect of Balewadi Stadium for Commonwealth Youth Games and Delhi Development Authority.
++ In view of the above [Circular No. 80/10/2004-ST dt. 17.9.2004 & Anand Construction Co. (supra), S.M. Sai Construction (supra) and in the case of B.G. Shirke Construction Technology Pvt. Ltd. (supra)], we hold that the demand of service tax in respect of services provided to Government of Maharashtra, Delhi Development Authority and ShriSathyaSai Health & Education Trust, cannot be sustained and the same is set aside.
In fine, the appeal was partly allowed and partly remanded to the original adjudicating authority.
(See 2017-TIOL-2483-CESTAT-MUM)
