Sundardas Gyanchand Vs Commissioner of CGST & Central Excise (CESTAT Delhi)
CESTAT Delhi dismissed the appeal filed by M/s. Sundardas Gyanchand and upheld the Commissioner’s de novo order confirming a service tax demand of ₹10,93,968 along with interest and penalties.
The dispute originated from a Show Cause Notice dated 07.10.2010 proposing a service tax demand of ₹58,56,059. The matter had earlier been adjudicated by the Commissioner, and on appeal, the Tribunal remanded the case for fresh examination in light of the Supreme Court’s decision in Larsen & Toubro Ltd. During the de novo proceedings, the Commissioner granted multiple opportunities for personal hearing. After considering the facts, contractual terms, and use of materials in the execution of work, the Commissioner concluded that the contracts entered into by the appellant were in the nature of “works contract service.” Consequently, he allowed the benefit of abatement and reduced the demand from ₹58,56,059 to ₹10,93,968.
Before the Tribunal, the appellant contended that the Commissioner had not determined the classification of the services rendered. The Tribunal rejected this contention, noting that the Commissioner had specifically examined the contracts and classified them as “works contract service,” which formed the basis for the reduced tax demand.
The appellant also argued that it had not provided “construction of residential complex service.” The Tribunal observed that the impugned order did not confirm the demand under that category but under “works contract service,” making the argument irrelevant.
