The Tripura High Court has dismissed the appeal filed by the department as the service tax demand and recovery of Rs. 4.70 Crores against National Building Construction Corporation Ltd. (NBCC) without any grounds mentioned in Show Cause Notice (SCN) and without bifurcation.
The bench of Justice T. Amarnath Goud and Justice Biswajit Palit has observed that the details of Rs.4.7 crore demand is not given in the show cause notice. As far as show notice is concerned that also is the matter which fell for consideration before the Appellate Authority in all the quasi judicial proceedings for determination of the tax and the bifurcation was supposed to be done for claiming the tax amount.
The appellant/assessee, M/S National Building Construction Ltd., Agartala engaged in executed Civil Engineering Projects, rendered consultancy services and development of real estate projects among others in the category of ‘Construction Engineering & Consultancy Services’ thus receiving agency charge @ 10% of the estimated project cost entrusted to them.
On 09-09-2003 NBCC entered into agreement with the Chief Commissioner of Income Tax, Guwahati for design and construction of office building for Income Tax at Guwahati and agreed to receive agency charge @ 8% of the actual cost of the project.
It was observed that NBCC, Agartala had received Rs.58.76 crore since December, 2001 as agency charge from their clients which are taxable and on which service tax amounting to Rs.4.70 crore (calculated @ 8%) have not been paid by the respondent which is recoverable. Therefore a notice was issued to NBCC requiring to show cause for demand and recovery of service tax of Rs.4.70 crore, payment of interest and imposition of separate penalty for failure to pay service tax and suppression/concealing value of taxable service.
However, a corrigendum had been communicated in which the respondent had been made answerable to the Commissioner, Central Excise, Shillong who ordered confirmation of demand and recovery of the service tax of Rs.4.70 crore and interest at applicable rate. A penalty of Rs.4.70 crore was also imposed on NBCC, Agartala.
The NBCC filed appeal before the CESTAT against the order and accordingly CESTAT, set aside the order and remanded the matter to the adjudicating authority to allow NBCC a chance to produce necessary evidence with a view to bifurcating the amount attributable to Consulting Engineering Service charges and for quantifying the service tax leviable thereon.
The Commissioner, Central Excise Shillong while proceeding for de-novo adjudication taken up various points which were not as per the specific direction of the Tribunal order and dropped the proceedings initiated against M/S NBCC Agartala. The appellant herein on being aggrieved by the de-novo adjudication order preferred an appeal before the CESTAT, Kolkata but the same was rejected by the Tribunal upheld the order passed by the adjudicating authority.
There was a chequered history involved in this matter and going to the grass root level of this case the only point which falls for consideration is the show cause notice dated 22.12.2004 which is issued in favour of the respondent making a demand for Rs.4.70 crore by the appellant herein. On fair reading of the notice, it appears that there is no whisper as to how Rs.4.7 crore the respondent company needs to pay or the appellant is entitled to the claim by way of service tax. Though it is reflected in the show cause appended with the appeal, the show cause notice pertains to imposition of Rs.4.7 crore but no ground is mentioned.
The court held that the appeal needs no interference from this Court and hence the appeal stands dismissed being devoid of merit.
Case Details
Case Title: Union of India and Anr. Versus M/s National Building Construction Corporation Ltd.
Case No.: Central Ex.App. 4 of 2024
Date: 28.01.2025.
Counsel For Appellant: Adv. P. Datta
Counsel For Respondent: B. N. Majumder, Sr. Advocate
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