Shree Mahalakshmi & Co. Vs Commissioner of GST and Central Excise (CESTAT Chennai)
The appellant, M/s. Shree Mahalakshmi & Co., challenged an Order-in-Original confirming service tax of Rs.1,52,07,369 along with interest under Section 73(2) of the Finance Act, 1994 and imposing equivalent penalty under Section 78 and a penalty of Rs.10,000 under Section 77(2). The dispute related to the period from April 2008 to June 2012.
The appellant was registered for Commercial or Industrial Construction Services and Construction of Complex Services and had filed periodic ST-3 returns. During departmental verification, it was noticed that the appellant had executed construction contracts for various educational institutions, Government buildings and centre medians on National Highways. The Department treated these activities as taxable Works Contract Services, alleging that educational institutions collected fees and that the appellant had suppressed material facts by not correctly classifying the services.
Procedural History
A Show Cause Notice dated 21.04.2014 proposed recovery of service tax under Works Contract Service by invoking the extended period of limitation.
The adjudicating authority confirmed the demand, interest and penalties.
The appellant challenged the order before CESTAT Chennai.
Legal Issues
- Whether construction of educational institutions run by charitable trusts constituted Works Contract Service primarily for commerce or industry.
- Whether construction of Government office buildings was taxable under Works Contract Service.
- Whether construction of highway centre medians constituted works contracts in respect of roads excluded from service tax.
- Whether the extended period of limitation was validly invoked.
Relevant Statutory Provisions
- Sections 65(105)(zzzza), 73(1), 73(2), 77(2), 78 and 83 of the Finance Act, 1994.
- Section 37B of the Central Excise Act, 1944.
- CBEC Circular No. 80/10/2004-ST dated 17.09.2004.
Appellant’s Submissions
