Rokia Bibi (Suhana Construction) Vs Commissioner (CESTAT Kolkata)
The CESTAT Kolkata allowed the appeal after holding that the appellant had complied with the statutory pre-deposit requirement and that the confirmed service tax demand was unsustainable both on merits and on limitation.
At the outset, the Tribunal noted that no one appeared on behalf of the appellant despite notice. The Registry had raised a defect memo alleging non-fulfilment of the pre-deposit requirement. On examining the appeal records, the Tribunal found that the appellant had enclosed three GAR-7 challans dated 19.08.2015, 25.08.2015 and 12.06.2016 evidencing payments of ₹2,21,919, ₹2,01,901 and ₹2,54,442 respectively. Considering these challans together, the Tribunal held that the required pre-deposit against the disputed amount of ₹21,90,117 stood satisfied. It observed that the Commissioner (Appeals) had declined to consider these challans towards pre-deposit even though they related to the period 2015-16 covered by the show cause notice. The Tribunal also noted that the Order-in-Original had been passed ex parte and, had the challans been produced before the adjudicating authority, those amounts could have been appropriated towards the pre-deposit. Accordingly, the Tribunal held that the defect stood cured and directed the Registry to register the appeal.
On merits, the Tribunal observed that the show cause notice dated 30.09.2020 for the period 2015-16 had been issued solely on the basis of Form 26AS obtained from the Income Tax Department. Form 26AS reflected payments received by the appellant from Larsen & Toubro Limited and Gannon Dunkerley & Company Limited. The appellant produced invoices demonstrating that it had rendered only manpower services to these companies. The Tribunal found that, in respect of manpower services rendered by a proprietorship concern, service tax was payable by the recipient companies under the Reverse Charge Mechanism (RCM). Consequently, the appellant was not liable to pay service tax on those services. The Tribunal therefore set aside the confirmed demand on merits.
