CESTAT, MUMBAI BENCH
B.E. Billimoria & Co. Ltd.
Commissioner of Service Tax, Mumbai
Application No. ST/S/729 of 2012
Appeal No. ST/211 of 2012
June 5, 2012Online GST Certification Course by TaxGuru & MSME- Click here to Join
Ashok Jindal, Judicial Member
Appellant are in appeal against the impugned order confirming the service tax demand of Rs. 14,28,30,465/- along with interest and equivalent penalty under Section 78 of the Finance Act, 1994.
2. Heard both sides.
3. After hearing both sides at length we are of the opinion that the matter can be disposed at this stage. Therefore, we waive the requirement of pre-deposit and take up the appeal for disposal.
4. The brief facts of the case are that the appellant are engaged in the Construction of Complex Services and Commercial or Industrial Construction Service. The appellant are registered under Commercial or Industrial Construction Service, Construction of Complex Services and Work contract services. The impugned period is October 2008 to March 2009 for the services provided by them under the category of Commercial or Industrial Construction Service and Construction of Complex Services. The appellant took the benefit of Notification No. 1/06 dated 1.3.2006. As per the said Notification, if the assessee does not take the credit if inputs, input services or capital goods for providing the above services, the assessee is liable to pay service tax on 33% of the total receipts against this services. With regard to Work contract services, the appellant are availing input/input service credit and discharging their service tax liability without claiming any benefit of the Notification. During the impugned period, appellant utilised the CENVAT credit account for discharging their service tax liability under the Commercial or Industrial Construction Service and Construction of Complex Services on which they have not taken any credit of input/input service during the impugned period. The Revenue is of the opinion that appellant are not entitled to utilise the centralised CENVAT credit account for payment of service tax liability under these two categories. Therefore, a demand of Rs. 5,42,11,275/- was confirmed against the appellant and rest of the demand has been confirmed on account of that appellant are not maintaining separate account of their input/input service received by them. Therefore they are liable to pay as service tax 8% on the gross value of the service provided by them.
5. The ld. counsel for the appellant submits that as held by this Tribunal in Bharat Heavy Electricals Ltd. v. CCE  20 taxmann.com 301/35 STT 137 (Mum. – CESTAT). There is no bar to utilise centralised CENVAT account for payment of impugned services. Therefore, demand of Rs. 5,42,11,275/- is not sustainable. He further submitted that although the applicant has mentioned in their service tax returns that they are not maintaining separate account, factually the statement made in ST-3 returns is incorrect. In fact, they are maintaining separate account project-wise and they can produce the accounts maintained by them project-wise for the services under Commercial or Industrial Construction Service and Construction of Complex Services. They are not availing any credit of input services and in fact they have foregone a credit of Rs. 82 lakhs on this account. The adjudicating authority has not considered their contention on this ground that they are maintaining separate account, therefore, impugned order is not sustainable and same may be remanded back to the adjudicating authority to verify whether the appellant are maintaining separate account for input/input service or not.
6. On the other hand, ld. AR reiterates the finding in the impugned order and supported the same.
7. After careful consideration of the submission of both sides, we find that Rs. 5,42,11,275/- is not sustainable in the light of the decision of the Tribunal in Bharat Heavy Electricals Ltd. (supra) wherein it was held that the appellant are entitled to utilise centralised CENVAT credit for payment of service tax for the service availed under the category of Commercial or Industrial Construction Service and Construction of Complex Services.
8. The other contention of the ld. counsel is that they are maintaining separate accounts. This contention is a fact on record, which can be ascertained at the level of the adjudicating authority whether the appellants are maintaining separate account of input/input services for providing exemption/taxable service. As the appellant has been able to produce before us showing that they are maintaining separate account project-wise and they have foregone CENVAT credit on input/input service in relation to the services provided by them for Commercial or Industrial Construction Service and Construction of Complex Services. Therefore, matter needs examination at the end of adjudicating authority to ascertain the fact that they are maintaining separate account for input/input service during the impugned period for providing the taxable/exempted services by them.
9. In view of this observation, we set aside the impugned order and remand it back to the adjudicating authority to ascertain the fact whether the appellant are maintaining separate account for input/input service for providing the output services. All other issues are kept open. The appellant are also directed to cooperate with the adjudicating authority by producing all relevant documents in support of the claim that they are maintaining separate account for input/input service.
10. Appeal as well as stay applications are disposed of in the above terms.