Case Law Details
CA URVASHI PORWAL
Brief of the Case
In the case of Mittal Construction Co. V. Commissioner of Central Excise, Ludhiana, it was held that the principle of natural justice should be followed while deciding the matter by providing reasonable opportunity of being heard to the assessee.
Facts of the Case
The appellant- assessee is engaged in providing various services including site formation and clearance services. The assessee got itself registered with the department w.e.f 7.2.2006 for providing services of site formation. During the course of audit, the respondent observed that the appellant had provided services of protection, pipe laying using trenching/trenchless, reinstatement of trench, OFC cable blowing including other associated works to its clients namely M/s BSNL, Tata Tele Services, HFCL Infotel and HFCL Int. Division valuing Rs. 4,43,20,475/- during the year 2005-06. The respondent formed an opinion that the appellant was liable to pay tax amounting to Rs. 45,20,689/- whereas the appellant had paid tax amounting to Rs. 10,35,360/- only. Accordingly, a show cause notice dated 4.12.2007, was issued to the appellant to show cause as to why a sum of Rs. 34,85,329/-should not be demanded and recovered invoking the extended period of limitation. The appellant filed reply to the show cause notice inter alia pleading that it had carried out substantial part of work prior to levy of service tax and thus, there was no question of levy of tax on services rendered prior to date of levy of tax. The adjudicating authority did not accept the submissions of the appellant and confirmed the demand of service tax amounting to Rs. 34,85,329/- alongwith interest and imposed penalty under sections 76 and 78 of the Act vide order dated 5.3.2008. Aggrieved by the order, the appellant filed appeal before the Commissioner (Appeals). The appellant submitted copies of all the agreements executed with different parties. It was clarified by the appellant that out of total amount received i.e. Rs. 4,43,20,475/-, a sum of Rs. 1,58,15,689/- related to the work executed prior to 16.6.2005. There was no question of levy of service tax on the said amount. According to the appellant, service tax was payable on the amount actually received. It was further submitted that the appellant had not carried out the work of horizontal drilling for the passage of cables or drain pipes. Thus, the case of the appellant was covered by clarification dated 27.7.2005 issued by the Board. The appeal of the appellant came up for hearing before the Commissioner (Appeals) on 3.9.2008. The Commissioner (Appeals) vide order dated 3.9.2008, allowed the appeal holding that service tax was not payable on services rendered prior to 16.6.2005 relying upon the Board’s circular dated 27.7.2005 and after examining the contracts as well as certificates issued by various service recipients. It was concluded that the activities of the appellant did not fall within the purview of site formation and clearance, excavation and earthmoving or levelling. The department filed an appeal before the Tribunal against the order dated 30.9.2008 passed by the Commissioner (Appeals) on the ground that the services of the appellant did fall under clause (iii) of Section 65(97a) of the Act. The appeal was filed in the year 2009. It was held that the activity of the appellant was covered under clause (iii) of Section 65(97a) of the Act and the appellant was liable to pay tax. On receipt of copy of the order passed by the Tribunal, the appellant filed an application seeking recalling of the order dated 23.7.2014 and restoration of the appeal. The appellant submitted that it had not received notice of hearing and had engaged Shri Kamal Jeet Singh, Advocate as its counsel who in the absence of receipt of hearing notice failed to appear before the Tribunal. The said application came up for hearing before the Tribunal on 7.9.2015 though it was filed in October 2014. The Tribunal vide order dated 7.9.2015 dismissed the application on the ground that notice was dispatched on the address furnished in the memo of appeal which was a correct address. Hence the instant appeal by the appellant-assessee.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
