Ajay Mishra Vs Commissioner of Service Tax (CESTAT Delhi)
CESTAT Delhi held that the service tax is not applicable to the services provided in the State of J&K irrespective of the service provider being from the said State or otherwise. Accordingly, service tax is not leviable on Consulting Engineering Services rendered to the clients for construction of road in the State of J&K.
Facts- The appellants are engaged in providing the taxable services of ―Consulting Engineer Service (CES) to their major clients for providing consultation for road, bridges, tunnels etc. to their clients namely M/s Euro Studio, Spain, M/s Euro Studio, SL, Jammu & Kashmir and M/s NHAI, M/s Getinsa Ingeneria.
Based on the documents recovered during search and received from the appellants, the Department formed an opinion that the Consulting Engineers Services as provided for a road in Jammu & Kashmir, in the present case, are not exempted from the levy of service tax as is mentioned by the appellant. The Department while relying upon Rule 3 and 8 of place of provision of Service Rules, 2012 formed the opinion that the service recipient of the appellants, their registered premises, location of their business establishment and their territory all fall in the taxable territory, hence, the assessee is not entitled for availing exemption rather was liable to discharge the service tax liability.
The Department, from the scrutiny of documents, also found the difference in the value shown for the services rendered by the appellants in balance sheets vis-à-vis ST-3 returns during the period from F.Y. 2010-2011 to 2013-2014. The availment of Cenvat credit was also observed to be availed on the strength of such invoices, which were not issued to the registered premises of the appellants.
Conclusion- Held that the appellant as well as service recipient, though both have their Head Offices in taxable territory but the provision of service was outside the taxable territory i.e. in the State of J&K. Hence the Department herein was not liable to charge the service tax qua the said provision of service.
Circular bearing Notice No. 14/2004 dated 28.04.2004 has clarified that the service tax is not applicable to the services provided in the State of J&K irrespective of the service provider being from the said State or otherwise.
Held that there is no denial of the Department about the requisite price available on the invoices based whereupon the Cenvat credit has been availed by the appellant. Though the address mentioned thereupon is different from the registered address, but as apparent from show cause notice itself the appellant were found existing on the address mentioned in the invoice with explanation of the circumstances about shifting to the different address. Hence the objection about address is nothing but simply a procedural lapse. Substantial benefit of availment of Cenvat credit cannot be denied on the grounds of procedural lapse. Resultantly we hold that Cenvat credit has been properly availed by the appellant based on the invoices.
FULL TEXT OF THE CESTAT DELHI ORDER
Present order disposes of two appeals arising out of the same order-in-original bearing No. 003/102/16-17 dated 20 June 2017. The said order has adjudicated two separate show cause notices as were served upon the appellants. The extended period of limitation has been invoked by the Department while issuing the show cause notice. The details are as follows :-
