Prasad Engineering Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
The appeal was filed against an Order-in-Appeal confirming a Service Tax demand of ₹6,65,529 based on alleged discrepancies between the figures reported in Form 26AS and the ST-3 returns filed by the appellant. The dispute arose from a Show Cause Notice dated 11.03.2020 issued for the period 2014–15 proposing recovery of service tax along with interest and penalty. The lower authorities confirmed the demand, following which the appellant filed the present appeal.
The appellant submitted that it was engaged primarily in providing horticulture services such as garden upkeep, watering, sweeping, fertilization, and spraying of insecticides. According to the appellant, these activities are exempt from Service Tax. In support of this contention, reliance was placed on the decision of the Tribunal in CCE & ST Ahmedabad-III v. Murlidhar Horticulture Pvt. Ltd.
The appellant explained that out of the total turnover of ₹57,01,589 considered in the show cause notice, an amount of ₹40,16,924 pertained to horticulture services. Since these services were claimed to be exempt, the appellant argued that the substantial portion of the demand could not survive if this turnover was excluded.
Regarding the remaining turnover of ₹16,84,665, the appellant stated that it related to manpower supply or recruitment services. Under the applicable provisions, Service Tax was payable only on 25% of the gross amount. On this basis, the taxable value would be ₹4,21,166 and the Service Tax liability would amount to ₹52,056. The appellant stated that it had already discharged ₹31,186 of this tax liability during the relevant period. The remaining amount of ₹12,870 was disputed primarily on the ground of limitation, as the show cause notice issued in March 2020 covered services rendered during the financial year 2014–15.
