Order Date – 27 February 2023

Parties: M/s. R.S. Constructions Vs The Commissioner of Service Tax

Facts –

• The Appellant, M/s. R.S. Constructions, is engaged in civil construction work. 
• A show cause notice was issued pursuance to the audit of account alleging that the appellant had not paid the Service Tax on Site Formation Service, Cargo Handling Service and Commercial or Industrial Construction Service provided to various clients and wrongly availed and utilized CENVAT credit.
• Appellant contended that Show Cause Notice is contrary to the C.B.E.C. Master Circular No. 1053/2/2017-CX. dated 10.03.2017. He also seriously contended that the authority has also not mentioned in the Show Cause Notice the relied upon documents, whereby the appellant was deprived of proper defence.

Issue –

• Whether the demand for service tax is in order?

Order –

• The Tribunal held that from the Notification No. 17/2005-S.T. dated 07.06.2005, it is clear that the appellant is well within its right to claim bona fides as to the non-payment of Service Tax on the Site Formation Service.
• The Tribunal relying on the judgment of Hon’ble Supreme Court in the case of M/s. Suchitra Components Ltd. held that Master Circular No. Circular No. 96/7/2007-S.T. dated 23.08.2007 can operate only prospectively, demand pertains to the construction services rendered to M/s. Petron Civil Engineering (P) Ltd., against which principal contractor had paid the Service Tax.
• From a perusal of the Show Cause Notice or the impugned Order-in-Original, it can be seen that the lower authority has not placed reliance on any evidence to support that the appellant was indeed engaged in the manufacture of exempted goods or was providing exempted services.
• The demands proposed in the Show Cause Notice, which thereafter have been confirmed in the impugned Order-in-Original, are without any basis or without any documentary evidence and that there is serious violation to the principles of natural justice and hence, no part of the demand can be sustained.