Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1329

Classification of activity under

Case: M/s ITD CEMENTATION INDIA LTD v/s COMMISSIONER OF SERVICE TAX, MUMBAI
 
Citation: 2008-TIOL-1402-CESTAT-MUM
 
Issue:- Construction work of "Diaphragm wall and anchor slab" at river water front – whether taxable under the category of “Site Formation and Clearance, Excavation and Earth moving Demolition Services" or fall under exclusion clause – pre-deposit ordered.
 
Brief Facts:- Appellant has constructed "Diaphragm wall and anchor slab with special fill" on the banks of the river Sabarmati under a contract from Sabarmati River Front Development Corporation Ltd. (SRFDCL). Allegation in show cause notice was that the applicant has provided services of "Site Formation and Clearance, Excavation and Earth moving Demolition Services" without getting themselves registered with Service Tax Department and have not paid service tax for providing the said service.
 
The Adjudicating Authority confirmed the demand of service tax with interest and imposed penalties on the appellant by holding that the service provided by them fell under the services of "Site Formation and Clearance, Excavation and Earth moving Demolition Services".
 
Aggrieved by the said order, appellant filed appeal before the Tribunal. Application for stay of order and for waiver of pre-deposit is filed.
 
Appellant’s Contention:- Appellant contended that the agreement executed with SRFDCL is only for the purpose of construction of "Diaphragm wall and anchor slab", which are constructed by the applicant and are in respect of water front and for the purpose of proper management of water resources. Reference was made to project report submitted by SRFDCL and to the fact that this project is for the purpose of proper use of water and water resources, which otherwise would have been wasted. It was submitted that the entire project is envisaged by SRFDCL is in fact of the Ahmedabad Municipal Corporation, in principal approved by the Central and State Governments. Reference was also made to letter dated 10.2.2006 written by the Municipal Corporation of Ahmedabad regarding the service tax liability. It was further said that the contract is for construction of diaphragm wall and anchor slab and the diaphragm wall is constructed for the purpose of regulating the flow of river which is for flood control, as well as recharging of ground water level. The construction of anchor slab is for support of diaphragm wall. The construction of anchor slab is used as walkways roads. It was said that according to the definition of services under which Revenue has confirmed service tax liability i.e. "Site formation and clearance, excavation and earth moving Demolition services". It was submitted that the activity done by them will be in exclusion clause as given in the definition.
 
It is also further submitted that the calculation arrived at for the purpose of demand of service tax is erroneous and has included the entire cost of materials, which goes into the construction of diaphragm wall and anchor slab. It was submitted that the entire demand is barred by limitation and the activity of construction and activity undertaken by SRFDCL was known to public at large. Appellant submitted that they may be granted unconditional waiver of pre-deposit of the amount involved in this case.
 
Respondent’s Contention:- Revenue argued that SRFDCL has clearly indicated in their Memorandum and Articles of Association that the project is perceived by the authorities, not for the purpose of any optimum use of water resources but for the purpose of reclamation of the land along the bank and to use the space for the purpose of recreation parks and gardens, promenades, informal market, commercial areas etc. It was further submitted that the services provided by the applicant were not for the purpose of renovating or restoring the water resources and the contract, which is awarded to the applicant, is entire project of SRFDCL.
 
Further Revenue submitted that the construction of diaphragm wall and anchor slab is in relation to the water body. That unless these diaphragm wall and anchor slab are constructed, the further activity would not take place as to but other scope of work is limited in connection with water body.
 
Reasoning of Judgment:- The Tribunal held that the entire project report of SRFDCL and the said SRFDCL project was envisaged for embankment and reclamation works, construction of major Level-one roads, installation of infrastructure (water, sewer, storm drainage) networks and construction of relatively sophisticated promenades and garden etc. The agreement entered by the SRFDCL with the current applicant is for diaphragm wall and anchor slab. It is alleged that the said activity of special fill will fall under the definition of services as provided under the "Site Formation and Clearance, Excavation and Earth Moving Demolition Services".
 
Further the Tribunal found that the appellant is relying upon the exclusion clause under the definition. Whether the services rendered by the applicant would get covered under the exclusion clause or not, and as to whether activity undertaken by the applicant is for renovating or restoring the water resources of water bodies needs to be gone into detail as also the issue regarding the question of limitation and wrong calculation of duty, which can be done so only at the time of final hearing as the issue is a arguable one. The Tribunal further held that the applicant has not made out a prima facie case for complete waiver of the amount of service tax confirmed.
 
Decision:- Pre-deposit ordered.
 
Comment:- This is not final decision but decision of stay application. But it gives the idea about the dispute between the party and the department. Whether it will fall under “Site formation and clearance, Excavation and Earth moving Demolition service” or under “Commercial construction service”? Whether it will be covered under the exclusion clause or it will be taxable? The time will tell.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com