1) Appellant was engaged in rendering of services of Site Formation for housing project.
2) He received a work order No.SICCL/SCH/AMRITSAR/WO/04 dated 17.06.2006 from M/s. Sahara India Commercial Corporation Ltd. (SICCL) for rendering Site Formation, Clearance, Excavation, earth moving and demolishing service.
3) Payments for the said work order were made vide cheque No.1956, dated 17.06.2006 and cheque No.1963, dated 21.06.2006.
4) The appellant also issued a bill No. Sahara/06-07/01 dated 18.08.2006 for an amount of Rs.6,08,49,000/- and in the particulars column of the bill it is stated being charges for agriculture land levelling, soil filling thereon and of gorges/nallah, removing of shrubs, grass and rubbish, etc. at vill. Manawala, Amritsar (Area covered 24.00 Acres (approx)).
5) Appellant did not paid any service tax on the said service and did not show this amount in its ST-3 returns. During investigation, it did not even submit details sought in spite of summons issued and the details about the said work order dated 17.06.2006 were obtained from SICCL.
6) The adjudicating authority held the said service liable to service tax under Site formation service [defined under Section 65 (97a)] of the Act and imposed penalties clearly holding that there was suppression of facts to evade service tax and thereby the extended period was invocable.
7) Appellant filed an appeal against OIO No.01/COMMR./ST/GZB/2013-14, dated 15.05.2013 .
Tribunal held that the service provided by appellant was not in relation to agriculture. Further appellant’s claim that service provided by it are eligible for exemption under notification no. 17/2005-ST, dated 07.06.2005 is not valid as the service rendered by the appellant was not in the course of construction of roads, airport, railways, transport terminal, bridges, tunnels, dams, ports or other ports .
Appellant’s Contention :
The appellant contended that
(i) the demand is time barred as there was no wilful mis-statement or suppression of facts,
(ii) the Show Cause Notice was not valid as it was not specified under which specific clause of Section 65 (97a) of the Act the impugned service was covered,
(iii) the service rendered was agricultural land levelling, which is excluded from the purview of Section 65 (105) (zzza) read with Section 65 (97a) of the Act,
(iv) Further enquiry in this case began in the year 2008. The appellant was also audited by jurisdictional commissionerate, which made enquiries and issued summons in the year 2009 and it (the appellant) had given copies of the balance sheet for the period 2005-06 to 2009-10 to the jurisdictional commissionerate. Thus, there was no wilful mis-statement/suppression of facts on its part. The Show Cause Notice was issued after more than one year of the commencement of the enquiry and on that count also demand is time barred.
(v) It was further submitted that the demand was time barred also because there was another Show Cause Notice issued by the commissionerate covering the same period and it cited the judgement of the Supreme Court in the case of Duncans Industries Ltd. Vs. CCE, New Delhi [2006 (201) ELT 517 (SC)] and the judgement Kolkata High Court in the case of Avery India Ltd. Vs. Union of India [2011 (268) ELT 64 (Cal)] to advance the proposition that there could not be two assessments for the same period and so two Show Cause Notices could not have been issued in relation to the same period. It also cited a catena of judgements including the judgements of the Supreme Court in the cases of Uniworth Textiles Ltd. Vs. CCE, Raipur [2013 (288) ELT 161 (SC)] and CCE, Aurangabad Vs. Bajaj Auto Ltd. [2010 (260) ELT 17 (SC)] to contend that mere non-payment is not suppression of facts and that the onus to prove that there was wilful mis-statement or suppression of facts on the part of the appellant is on Revenue which it (i.e., the Revenue) has failed to discharge. It also referred to the judgement of the Delhi High Court in the case of CIT Vs. Kelvinator of India Ltd. [2002 ITR (256) (Delhi)] to contend that mere change of opinion of an Assessing Officer is not a ground for re-assessment.
(vi) Moreover work done by the appellant related to activities of agricultural land levelling, which was excluded from the taxable service under Section 65 (105) (zzza) read with Section 65 (97a) of the Act.
(vii) It was under a bona fide belief that the service tax was not leviable.
Revenue’s Contention :
Ld. Departmental Representative argued that
(i) The work carried out was not relating to agriculture and covered under site formation and clearance, Excavation and Demolition service is defined in Section 65 (97a).
(ii) Not including the impugned amount in the ST-3 returns clearly amounts to suppression of facts. Even the details regarding the work order were not provided by the appellant (and the same were obtained from M/s. SICCL) which also shows suppression of facts.
Court’s Order :
1) Tribunal held that the SCN dated 05.05.2011 was issued within a period of five years, which is the extended period available for issuing the same in case of wilful mis-statement/suppression of facts on the part of the appellant with intent to evade payment of service tax. Perusal of Section 73 ibid makes it clear that the only requirement for Revenue to be able to invoke extended period of five years is to establish suppression, collusion or wilful mis-statement with intent to evade service tax and the date on which Revenue discovered or became aware is not a variable in this equation. It establishes suppression on the part of appellant that it had not reflected amount received in ST-3 . Moreover, the details about the said payment received were never submitted by the appellant during the enquiry. Indeed, the said details were, (had to be), obtained from the service recipient (SICCL). It is on record that Investigating Officer asked the appellant vide letter dated 02.02.2010 to submit the facts and figures, copies of work order, bank statement, etc., but the same were never supplied by the appellant and it was only then that the Investigating Officer called for the information details from the service recipient, SICCL. Thus in this case the issue of SCN is valid.
2) The definition of site formation and clearance, Excavation and Demolition service is defined in Section 65 (97a) ibid as under:-
Site Formation and clearance, Excavation and Earthmoving and Demolition includes,
(i) Drilling, boring and core extraction services for construction, geophysical, geological or similar purposes; or
(ii) Soil stabilization; or
(iii) Horizontal drilling for the passage of cables or drain pipes; or
(iv) Land reclamation work; or
(v) Contaminated top soil stripping work; or
(vi) Demolition and wrecking of building, structure or road, but does not include such services provided in relation to agriculture, irrigation, watershed development and drilling, digging, repairing, renovating or restoring of water sources or water bodies;
Thus the only exclusions in the said definition in Section 65 (97a) ibid are such services provided in relation to agriculture, irrigation, watershed development and drilling digging, repairing, renovating or restoring of water sources or water bodies.
The appellant has tried to state that it did the work on the agricultural land as confirmed by the Patwari. In this regard it is suffice to say that even if it is presumed that the land on which work was done was agricultural land, the service rendered by the appellant was not in relation to agriculture. The service rendered to SICCL was in relation to a housing project in Amritsar. The appellant has only tried to obfuscate the issue by saying that the work was on agricultural land. As per Oxford dictionary, word agriculture means science or practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food, wool and other products. It is evident that the service rendered by the appellant was in relation to none of these activities. In other words, the service rendered was not in relation to agriculture as claimed by the appellant.
Thus there was no ambiguity or doubt about coverage of the service rendered by the appellant under the scope of Site Formation and Clearance, Excavation and Earthmoving and Demolition service.
In these circumstances, it is held that the extended period as well as Section 78 of the Finance Act, 1994 are invokable in the present case.
3) It is to be noted that appellant’s claim that he is eligible for exemption under Notification No.17/2005-ST, dated 07.06.2005 is not valid as the service rendered by the appellant was not in the course of construction of roads, airport, railways, transport terminal, bridges, tunnels, dams, ports or other ports and therefore, the said Notification (No.17/2005-ST) is clearly not attracted in this case.
4) As regards the contention of the appellant that for the same period another Show Cause Notice was issued by Revenue and therefore the Show Cause Notice in respect of which the impugned order was issued could not have been issued as has been held in the case of Avery India Ltd. and Duncans Industries Ltd. (supra), it is to be noted that the other Show Cause Notice was related to different set of facts and did not cover the transaction covered in the present Show Cause Notice. In that Show Cause Notice, the demand was raised for rendering of service of road repair and the present transaction/service was not the subject matter of that Show Cause Notice at all. Thus, the judgments of the Supreme Court in the cases of Avery India Ltd. and Duncans Industries Ltd. (supra) do not find any applicability as those judgements would be applicable in case of unity of transactions. Moreover, it is also not a case of re-assessment as a result of mere change of opinion of assessing officer. It is a case of detection of evasion involving suppression of facts and therefore Supreme Court judgement in the case of CIT Vs. Kelvinator of India (supra) is not applicable here.
In the light of the foregoing, tribunal held that the appeal is rejected .
Compiled by Our Team member CA Amit Handa