Mira Construction Vs Principal Commissioner of CGST & Central Excise (CESTAT Mumbai)
A show cause notice was issued proposing to demand service tax of over Rs.8 crores under “works contract” service based on comparison between TDS data (26AS) and ST-3 returns filed by the appellant. CESTAT Mumbai sets aside CGST order against Mira Construction, remanding the case for fresh examination of service tax exemptions under works contract services.
Summary: The case of Mira Construction vs. Principal Commissioner of CGST & Central Excise involved a demand of over ₹8 crores in service tax under the “works contract” category. The tax liability was determined based on a comparison between TDS data (Form 26AS) and the appellant’s ST-3 service tax returns. Mira Construction, engaged in government and municipal projects like schools and drainage systems, contested the demand, arguing that their services were exempt under various provisions of Mega Exemption Notification No. 25/2012. The Principal Commissioner imposed the tax, interest, and an equivalent penalty, citing non-submission of financial documents for a specific period and using a best judgment assessment under Section 72 of the Finance Act, 1994. The appellant countered that relevant work orders and supporting documents had been ignored.
CESTAT Mumbai ruled in favor of Mira Construction, setting aside the tax demand and ordering a fresh review by the Commissioner. The tribunal found that the demand was wrongly confirmed using best judgment assessment and that the exemption claims had not been adequately reviewed. The case was remanded for verification of individual work orders to determine eligibility for exemptions. The ruling highlighted procedural lapses in the initial assessment and the necessity of a case-by-case examination of service tax applicability in government construction contracts.
