Order Date – 10 July 2023

Parties: M/s Segmental Consulting & Support Services Pvt. Ltd. & Shri Ajay Mishra, Director M/s Segmental Consulting & Support Services Pvt. Ltd. Vs Commissioner of Service Tax, Delhi – III, Commissionerate

Facts –

• The Appellant, M/s Segmental Consulting & Support Services Pvt. Ltd., are engaged in providing the taxable services of “Consulting Engineer Service” (CES).
• On a search conducted by the department it was found that the Consulting Engineers Services as provided for a road in Jammu & Kashmir, in the present case, are not exempted from the levy of service tax. Further noticed difference in the value shown in balance sheets vis-à-vis ST-3 returns during the period from financial year 2010-2011 to 2013-2014. The availment of Cenvat credit was also observed to be availed on the strength of such invoices, which were not issued to the registered premises of the appellants.
• Accordingly, two show cause notices were issued and the demands were confirmed.

Issue –

• Whether the appellant is liable to pay service tax on Consulting Engineer Services rendered by the appellant?

Order –

• The Tribunal observed that the appellant as well as service recipient, though both have their Head Offices in taxable territory but the provision of service was outside the taxable territory i.e. in the State of J&K. Hence the Department herein was not liable to charge the service tax qua the said provision of service. The adjudicating authority below is, therefore, held to have committed an error while rejecting the appeals.
• In the present case it is an admitted fact that the services provided by the appellants are towards the construction of a road meant for use by the general public. In light of above discussion and also from the point of view as already been held that for providing the consultation services for construction of road appellant had to be on site on regular basis, hence it was held that the services rendered by the appellants are wrongly held as taxable.
• Though the address mentioned in invoice is different from the registered address, but as apparent from show cause notice itself the appellant were found existing on the address mentioned in the invoice with explanation of the circumstances about shifting to the different address. Hence it was held that Cenvat credit has been properly availed by the appellant based on the invoices.
• Once the returns were filed regularly by the appellant the Department cannot alleged suppression against the appellant/assessee. It is mandatory for them to bring on record a positive act of the to prove the alleged suppression that too with an intent to evade tax.
• Once it is not the case of suppression with an intent to evade tax and once the appellant is held not liable to pay the service tax in the given facts and circumstances, the department was not entitled to invoke the extended period of limitation. The question of imposition of penalty upon the appellants also does not at all arise.