Order Date – 16 January 2023

Parties: M/s Varaha Infra Limited Vs Commissioner of CGST, Jodhpur

Facts – 

• The Appellant, M/s Varaha Infra Limited is engaged in providing taxable services under works contract etc.
• A show cause notice was issued alleging that appellant have not paid service tax of Rs. 2,90,628/- under RCM of renting of immovable property (office) in respect of rent charges paid to its Director. Also the appellant have done repair and maintenance work but have claimed higher abatement of 60% available for new work and liable to penalty for late filing of ST-3 Returns and is also liable to pay interest on delayed payment of service tax.

Issue – 

• Whether the demands raised in show cause notice is in order?

Order – 

• The Tribunal held that demand have been confirmed on payment of rent for office to Director of the Company during the period April 2014 to June 2017. The demand have been raised by invoking the extended period of limitation, on reverse charge basis vide SCN dated 13/07/2020. The situation is wholly neutral, this ground is allowed and the demand is set aside.
• As regards to availment of 60% abatement, it was observed that the appellant have done execution of new work after removing the existing structure and railing etc. Hence the demand is also set aside.
• Further, prior to issue of show cause notice dated13.07.2020 appellant have admittedly filed the service tax returns, about two years prior to it in the year 2018. Hence the quantum of penalty to Rs. 2000 per return or a total penalty of Rs. 6000/- under Section 77 r/w Rule 7C of Service Tax Rules.
• Interest under Section 75 is payable for delayed payment of service tax, as such tax has not been paid by the due date or within the prescribed period. Accordingly, the appeal is allowed.