Page 167 - GSTL_11th June 2020_Vol 37_Part 2

2020 ] RAJ ENGINEERING v. COMMISSIONER OF CENTRAL EXCISE, UDAIPUR 253
building or civil structure and “Management Maintenance or Repair Services”.
The Appellant filed an application in terms of Section 107(1) of Chapter VI of
Finance Act, 2013 under Service Tax Voluntary Compliance Encouragement
Scheme, 2013 (VCES), declaring the tax dues as Rs. 5,27,916/- for the period 2010-
11 to December. On scrutiny of the said declarations and that of P&L account of
Income tax return and Form AS 26 for the assessment year 2008-09 to 2013-14,
department formed an opinion that the appellant is liable to pay Service Tax
amounting to Rs. 21,98,813/- for the period 2008-09 to 2012-13. It was observed
that the amount of Rs. 5,27,916/- as was declared in the VCES was on account of
availing 67% abatement on gross receipts, but the said abatement was not availa-
ble to the Appellants. Accordingly, vide Show Cause Notice No. 89, dated
12-12-2014, department proposed the recovery of Service Tax amounting
Rs. 21,98,813 along with the interest at the appropriate rate and the proportionate
penalties under Sections 76 and 78 of the Finance Act, 1998. Finally, holding that
the Appellant has failed to make a true declaration, the same was also proposed
to be rejected.
3. While adjudicating the said show cause notice, though the VCES
declaration of the Appellant as was filed on 16-12-2013 was not rejected. Howev-
er, the demand of Rs. 2,23,644/- out of the proposed demand was confirmed
along with the imposition of penalty under Section 78 and the demand of interest
under Section 75. Still being aggrieved of the order that the Appellant is before
this Tribunal.
4. We have heard Mr. Vijay Kumar, Learned Advocate for the Appel-
lant and Mr. R.K. Majhi, Authorised Representative of the department.
5. It is submitted on behalf of the Appellant that the services as were
provided by the Appellants were mainly to the local authorities as that of
RRVUNL, RSAMB etc. i.e. to such authorities as are not existing for com-
merce/profits. The said services not being liable to tax, their VCES depositing an
amount of Rs. 5,27,916/- on 16-12-2013 was absolutely correct. In terms Section
107(1) of Chapter VI of Finance Act, 2013 read with Rule IV of Service Tax Volun-
tary Compliance Encouragement Rules, 2013.
6. It is submitted that demand vide the impugned show cause notice
for the period 2008-09 to 2012-13 is on the basis of Income Tax returns and Form
AS 26. The same cannot be the correct basis for adopting the value due to certain
exemptions and abatements being available to the Appellant. It is impressed up-
on that Appellant was entitled for exemption upto the turnover of threshold ex-
emption limit of Rs. 10 lakhs. They were also entitled for abatement of duty on
services rendered for finishing services as of is white-washing and painting.
They were not liable to pay Service Tax on the value of construction of single
residential unit. The amount deposited has been calculated after availing these
exemptions and the abatements. To a great extent the adjudicating authority has
considered that Appellant is entitled for the same. However, as far as the thresh-
old limit of Rs. 10 lakhs is concerned, the adjudicating authority has committed
an error for considering the limit of the preceding year i.e. 2007-2008 which was
beyond Rs. 10 lakhs. Learned Counsel has also pointed out that while confirming
the demand with respect to construction of private residential units, the CE cer-
tificate as submitted by the Appellant has not been considered. The adjudicating
authority has recorded that no certificate was found despite the same was at-
tached. However, the said certificate is shown to have been attached. The docu-
ments showing inclusion of material used and consumed while rendering ser-
GST LAW TIMES  11th June 2020  167