Page 132 - GSTL_11th June 2020_Vol 37_Part 2

218 GST LAW TIMES [ Vol. 37
availment - Since tax rate prescribed under the said Scheme mentioned in ST-3
returns, same to be treated as an option for availment of benefit of tax rate pre-
scribed thereunder - Failure to file specific option for which no specific format
or application prescribed either under the Finance Act, 1994 or any C.B.E. & C.
Circular, to be considered merely a procedural lapse - Further, availment of
Cenvat credit on input services cannot be a ground for denial of benefit of the
said Scheme when such Cenvat credit reversed - Sections 65(105)(zzzza) and 73
of Finance Act, 1994. [para 3]
Appeal allowed
REPRESENTED BY : Shri Bharat Raichandani, Advocate, for the
Appellant.
Shri M.K. Sarangi, Additional Commissioner (AR),
for the Respondent.
[Order per : S.K. Mohanty, Member (J)]. - Heard both sides and perused
the records.
2. Brief facts of the case are that the appellant is engaged in providing
works contract service and for that purpose, was registered with the jurisdiction-
al Service Tax authorities. During scrutiny of ST-3 returns for the period October,
2010 to March, 2011, the Service Tax Department observed that the appellant had
paid service tax @ 4% of taxable value, without filing any option for payment of
such amount of service tax on composition scheme, as provided under Rule 3 of
the Works Contract (Composition Scheme for Payment of Service Tax) Rules,
2007. The department interpreted that since no option under Rule 3 of the rules
had been exercised by the appellant, it should be liable to pay the service tax @
10.30%. Accordingly, show cause proceedings were initiated against the appel-
lant, seeking for recovery of the short paid service tax amount along with interest
and for imposition of penalties. The matter was adjudicated against the appellant
vide order dated 5-11-2012, wherein service tax demand of Rs. 27,07,015/- was
confirmed under Section 73 of the Finance Act, 1994 alongwith interest under
Section 75 of the Act. Besides, the adjudication order also imposed penalty under
Section 76 of the Act. On appeal, the Learned Commissioner (Appeals) vide the
impugned order dated 29-4-2013, has upheld confirmation of the adjudged de-
mand on the ground that no option had been exercised by the appellant for
payment of the amount provided under the Composition Scheme. He has also
considered additional ground that the appellant availed and utilized Cenvat
credit for the purpose of payment of the composition amount, which is not per-
missible under the statute.
3. On perusal of the relevant ST-3 returns available in the case file, we
find that the appellant had exercised the option for availing the Composition
Scheme inasmuch as it had declared the tax payable at 4%. Since, the appellant
has specifically mentioned about the rate prescribed under the Composition
Scheme, the same should be considered as compliance in terms of Rules, 2007
regarding availment of the option for the Composition Scheme. Besides, we also
find that no specific format or application has been prescribed either in the stat-
ute or by any circular issued by the Board, under which the option has to be ex-
ercised. Thus, non-filing of specific declaration before opting for the scheme is to
be considered as a mere procedural lapse, for which the substantive right pro-
vided under the statute for payment of composition tax cannot be whittled
down. Further, we also find that though the appellant had availed the cenvat

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