D R Makwana VERSUS C.C.E. & S.T.-Vadodara-I

Customs, Excise & Service Tax

Appellate Tribunal West Zonal

Bench At Ahmedabad

 

REGIONAL BENCH- COURT NO. 3

Service Tax Appeal No. 13696 of 2013-DB

(Arising out of OIO-22/STC/COMMR/BRC-I/2013 dated 07/08/2013 passed by Commissioner of Central Excise, Customs and Service Tax-VADODARA-I)

 

D R Makwana

VERSUS

C.C.E. & S.T.-Vadodara-I

 

WITH

 

Service Tax Appeal No. 13788 of 2013-DB

(Arising out of OIO-20-STC-COMMR-BRC-I-2013 dated 31/07/2013 passed by Commissioner of Central Excise, Customs and Service Tax-VADODARA-I)

K R Makwana Appellant

Rangoli Complex, Bhalej Road, Anand, Gujarat

VERSUS

 

C.C.E. & S.T.-Vadodara-I ……Respondent

1st Floor…Central Excise Building, Race Course Circle,

Vadodara, Gujarat – 390007

AND

 

Service Tax Appeal No. 13789 of 2013-DB

(Arising out of OIO-21-STC-COMMR-BRC-I-2013 dated 01/08/2013 passed by Commissioner of Central Excise, Customs and Service Tax-VADODARA-I)

 

T R Prajapati		……..Appellant
Dipawali Society, 100 Feet Road,
Indra Gandhi Marg,
Anand, Gujarat
	VERSUS
C.C.E. & S.T.-Vadodara-I 1st Floor…Central Excise Building, Race Course Circle, Vadodara, Gujarat – 390007		……Respondent

 

APPEARANCE:

Shri Mrugesh Pandya, Advocate for the Appellant

Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent

 

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON’BLE MEMBER (TECHNICAL), MR. C.L.MAHAR

 

 

Final Order No. A/ 11594 -11596 /2023

 

 

DATE OF HEARING: 22.03.2023 DATE OF DECISION: 24.07.2023

 

 

RAMESH NAIR

 

These appeals have been filed by M/s K.R. Makwana, M/s T.P. Prajapati and D.R. Makwana challenging the orders dated 31.07.2013, 01- 08-2013 and 07-08-2013 respectively passed by Commissioner Central Excise & Service tax, Vadodara, by which the Learned Commissioner confirmed the Service tax demand. Since the issue is common, we are deciding these appeals by this common order.

 

 

1.2 The brief facts of the case are that the Appellants are engaged in the business of Civil/ residential construction/ repair works for various state government authorities like Gujarat State Police Housing Corporation Ltd. (GSPHCL), Vadodara Anand Agricultural University, Anand etc. The preventive wing, Central Excise & Service tax, Vadodara –I, initiated an inquiry against the appellants stating that the appellants were providing taxable services under the category of (1) Construction of Complex Service

(2) Commercial or Industrial Construction Service but not discharging service tax liability on the services rendered by them. On further inquiry, during the scrutiny of documents submitted by the appellants it was found that appellants are engaged in providing services related to construction works and activities related to repairs/ renovation for M/s GSPHCL, Anand Agricultural University,  Anand and Executive Engineer’s office.  From the

 

recorded statements of the appellants it was understood that the appellant had not taken any registration of service tax and have not paid any service tax and also not filed any service tax returns. All the materials, labours etc. are supplied by the appellants and the government departments for whom they carry out the work do not supply any materials like cement, steel, sand, bricks etc. After the detail investigation, appellants were issued show cause notices for demanding service tax under proviso to Section 73(1) of the Finance Act, 1994 and also proposing imposition of penalties under Section 76, 77 & 78 of the Finance Act, 1994. In adjudication, demand was confirmed by the Ld. Commissioner vide impugned orders. Hence, the appellants filed the present appeals before this Tribunal. The details of demand are as follows:

 

Appeal No.	Name of Appellant	SCN dated	Order No. & Date	Demand
ST/13789/2013	M/s. T.R. Prajapati	F.No. V.ST(Adj.)15- 16/TR Prajapati/Commr- I/2013 dated 19.03.2013	OIO No. 21/STC/COMMR/BRC- I/2013 dated 01.08.2013	Service tax demand of Rs. 99,42,708 along    with interest and penalties.
ST/13788/2013	M/s. K.R. Makwana	F.No.V.ST.(Adj.)15- 15/KRMakwana/Commr- I/2013 dated 18.03.2013	OIO No. 20/STC/COMMR/BRC- I/2013 dated 31.07.2013	Service tax demand of Rs. 2,20,86,303 along    with interest and penalties.
ST/13696/2013	M/s D.R. Makwana	F.No. V.ST(Adj)15- 19/D.R. Makwana/Commr-I/2013 dated 20.03.2013	OIO No. 22/STC/COMMR/BRC- I/2013 dated 07.08.2013	Service tax demand of Rs. 1,95,71,516/- along    with interest and penalties.

 

 

2. Shri Mrugesh Pandya, Learned Advocate appeared and argued for the appellants. He submits that the issue involved in the present appeal pertains

 

to taxability of Construction Services provided to State Governments. The appellants have provided services inter-alia related to construction works and repairs/renovation for police quarters, Police Stations, Education Institution, Educational Museum, Court Building, Public Health Centers and other Buildings as per the requirement of State Government. The revenue does not dispute the said facts. Impugned show cause notices raised the demand of Service tax under the category i.e. “Construction of Complex Services” and “ Commercial or Industrial Construction Services” as defined under Section 65(30a) & 65(91a) and the same being taxable under Sub Section 105(zzzh) & Section 105(zzq) of the Section 65 of the Finance Act, 1994. The services provided by the appellants are not specifically covered under Section 105(zzzh) at all as per Explanation Section 105(zzzh) of the Finance Act, 1994 as alleged by the revenue. Construction/ repairs activity performed is specifically excluded as per Section 65(91a) of the Finance Act, 1994 as it pertains to personal use.

 

 

• He also submits that service provided by the appellants are not specifically covered under Section 105(zzq) of the Finance Act, 1994 as alleged in the impugned show cause notices. The construction/ repairs activities are not provided to commerce or industries.

 

• He further submits that the disputed issue was clarified by the CBIC vide Para 13.2 of Circular No. 80/10/2014 –ST dated 17.09.2004.He also submits that the present issue is squarely covered by various judgments of Tribunal. He placed reliance on following decisions.

 

• RD Contractor & Company Vs. CCE, Anand 2023(2)TMI -946-CESTAT, Ahmedabad
• Kanubhai Ramjibhai Makwana  CCE & ST. Vadodara-I – 2022(8)TMI

-645 –CESTAT Ahmedabad.

 

• B. Chy Ruchi Ram Khattar & Sons Vs. Commr. Of S.T., New Delhi -2015(38)STR 583 (Tri. Del.)
• Khurana Engineering Vs. Commr. Of C.Ex., Ahmedabad – 2011(21)STR 115 (Tri. Ahmd.)
• Sh,. DH Patelad Sh. RN Dobariya Vs. CCE & ST, Surat – 2013(10)TMI- 815 –CESTAT, Ahmedabad
• Shri S. Kadirvel Vs. CCE & ST, Trichy Vide Final Order No. 41504/2018 dated 11.05.2018
• BrahmaDevelopers  Commissioner of Central Excise, Tirunelveli- 2018(10)GSTL 27 (Tri. Chennai)
• Commissionerof Ex., Aurangabad Vs. Mall Enterprises- 2016(41) STR 199 (Tri. –Mumbai)
• Mittal Construction Commissioner of C.Ex. & ST, Jaipur –I 2018(11)GSTL 334 (Tri. Del.)
• Sima Construction Vs. Commissioner of C.Ex., Trichy – 2011(21)STR 179 (Tri. –Chennai)
• Commissionerof CGST, Jaipur  Jatan Construction Pvt. Ltd. -2019

(24)GSTL 552 (Raj)

• EraInfra  Pvt. Ltd. Vs. Commissioner of Service tax, Delhi –I – 2018(19)GSTL 52 (Tri. Del)
• Service tax Commissionerate Delhi –III Vs. Jaiprakash Associates Ltd. – 2022(61)GSTL 370 (Tri. Del.)
• GollaBabu Vs. Commr. Of C.Ex., Cus. & ST., Visakhapatnam-II- 2014(34)STR 125 (Tri. Bang)

 

3. On other hand, Shri Tara Prakash, Learned Deputy Commissioner (AR) for the Revenue reiterates the findings of impugned orders.

 

4. Heard both sides and perused the records of the case and carefully considered the submissions made by both the sides. We prima facie find that in the present matters demand of Service tax has been confirmed by the Ld. Commissioner under the category of “Construction of Complex Services” and “Commercial or Industrial Construction Services” as defined under the Section 65(30a) & 65(91a) and 65(105)(zzzh) & 65(105) (zzq) of Finance Act,  Appellants claimed that their construction activity provided to the government not covered under the above sections as per the Explanation of Section 105 (zzzh) of the finance Act, 1994 and not covered under Section 105(zzq) of the Finance Act, 1994 as they have not provided services to commerce or industries. It is observed that in impugned orders Learned

 

Commissioner has not considered the aforesaid claim of the appellants and confirmed the service tax demand on the ground that appellants have not directly provided the services to the government of Gujarat or Police department or others.

 

• It is also observed that appellants have relied upon various case laws on the issue in hand, however the facts of each case needs to be examined to apply the ratio of the judgments relied upon by the appellants, which has not been done by the adjudicating authority in the present case. Since the adjudicating authority has not examined the claim of the appellants and the judgments relied upon in impugned orders, the matter needs to be remanded to the Adjudicating authority for fresh decision.

 

5. Accordingly, while keeping all the issues open, we set aside the impugned orders and allow the appeals by way of remand to the Adjudicating Authority.

 

 

 

(Pronounced in the open court on 24.07.2023)

 

RAMESH NAIR MEMBER (JUDICIAL)

 

C.L.MAHAR MEMBER (TECHNICAL)

 

 

Geeta