M/S. Tuscon Engineers Pvt. Ltd. Vs. Commissioner of Service Tax, Kolkata - Court Judgment

Excerpt:
finance act, 1944 - section 78 - dr. d. m. misra, j. 1. this is an application for waiver of predeposit of service tax of rs.4.71 crores and equal amount of penalty imposed under section 78 of the finance act, 1944. 2. at the outset, the ld.c.a. appearing for the applicant, has submitted that during the period from 2005-2006 to 2009-2010, they have rendered services under the category of industrial and commercial construction services to various clients by way of erection, commissioning, installation of cement plants. he submits that the ld. adjudicating authority has confirmed the demand denying the benefit of notification no.1/2006-st dated 01.03.2006. it is his submission that in execution of the contract of various cement plants, the applicant purchased the raw materials for the clients and later got it reimbursed ; also the major portion of the material involved in execution of contract, are purchased by them and used in the execution of work. the ld. c.a., in support, placed the bills, invoices relating to purchase of raw materials. he submits that all these documents could not be placed before the ld.adjudicating authority, as they could not get an opportunity to place these documents. he submits that in the event, if these documents are allowed to be placed before the ld.adjudicating authority for scrutinization, then, it would establish their case that in execution of the contract, they have procured and supplied the raw materials, whereby, make them eligible to the benefit of notification no.1/2006-st dated 01.03.2006. in the event, the abatement of 67% of value as per notification no.01/2006-st dated 01.03.2006, is allowed, then, there would be no liability on them. he submits that the company is running under loss and they have no means to deposit any amount. however, he has made an offer to deposit rs.12.00 lakhs and prayed that the appeal be remanded to the adjudicating authority for deciding the issue afresh. 3. the ld. a.r. for the department, has reiterated the findings of the ld.commissioner (appeals). he has fairly accepted that all the documents now produced need to be scrutinized by the authorities below as the same had never been placed before him. he has no objection for remanding the case for fresh decision. however, he pleads that the appellant be put to terms. 4. after hearing both sides, we find that the appeal itself could be disposed of at this stage. consequently, with the consent of both sides, the appeal is taken up for final disposal. 5. prima-facie, we find that the appellant had executed various contract in construction of the cement plant and the said services,undisputedly fall under the category of industrial and commercial construction services. the dispute centres around the fact that even though the applicants have purchased and used the raw materials in execution of the said services, the department has denied the abatement under notification no.01/2006-st dated 01.03.2006. prima-facie, from the records placed before us, we find that the appellant had purchased and used the materials in the execution of taxable services. these evidences, which have not been placed before the adjudicating authority, need to be scrutinized and verification. both sides agree that the matter be remanded to the adjudicating authority. we agree with the ld.a.r. for the revenue that the appellant should be put to terms before remanding the case. accordingly, we direct the appellant to deposit rs.12.00 lakhs within a period of six weeks from today and report compliance directly to the ld.commissioner. the adjudicating authority would decide the issue afresh, after recording compliance. consequently, we set aside the impugned order and remit the matter to the adjudicating authority for re-consideration of the case afresh. needless to mention, a reasonable opportunity of hearing be granted to the appellant to present their case. all issues are kept open and both sides are at liberty to produce evidences in their support. 6. the appeal is allowed by way of remand. stay petition is disposed off.