Computer Access Pvt. Ltd. Vs Commissioner of Central (Madras High Court)
The Madras High Court heard a Civil Miscellaneous Appeal under Section 35G of the Central Excise Act challenging the CESTAT’s final order in Appeal S.T. No.28/2011. The appellant had entered into a work contract with WIPRO Limited to provide (i) repair and maintenance of modems and networking equipment, and (ii) maintenance and facilitation of leased lines, including upgrading existing lines and obtaining approvals for Wide Area Networks (WAN).
The appellant contended that, in relation to leased lines, it merely acted as a system integrator’s facilitator by liaising with BSNL, which alone carried out the repair work. It claimed that it had no liability under the Finance Act, 1994, did not collect service tax from WIPRO, and that WIPRO, as the system integrator, had included the consideration paid to the appellant in its taxable turnover and discharged the service tax liability. Nevertheless, a show cause notice dated 13.04.2009 was issued demanding service tax. By Order-in-Original No.17 of 2010 dated 03.11.2010, the Commissioner confirmed a service tax demand of Rs.2,14,65,932 for the period from July 2004 to March 2008.
The appellant’s appeal before the CESTAT resulted in confirmation of the service tax demand, while the penalty was set aside. Aggrieved by that decision, the appellant approached the High Court. The Court framed three substantial questions of law relating to the sustainability of the extended period of limitation after waiver of penalty, invocation of the extended period in the context of revenue neutrality, and whether the burden of proof lay upon the Revenue or upon the appellant where the main contractor had discharged service tax liability.
