Bhavna Construction Co. Vs Commissioner of Service Tax

The Customs, Excise and Service Tax Appellate Tribunal, in a decision dated January 5th, 2017, upheld the revenue’s argument that the appellant couldn’t claim the benefit of Section 67(2) as they hadn’t provided evidence showing that the gross amounts they received for services included service tax. Consequently, the appellant couldn’t make further deductions. A subsequent review petition against this decision, dated September 22nd, 2017, was also dismissed.

It’s important to note that prior to this, the Original Authority had confirmed the appellant’s service tax liability and imposed penalties under Sections 77 and 78 of the Finance Act, 1994. The appellant had contested the Original Authority’s decision.

The Customs, Excise and Service Tax Appellate Tribunal (referred to as the ‘Tribunal’) issued an order on January 5th, 2017, accepting the revenue’s assertion that the appellant couldn’t avail the benefits of Section 67(2) because they didn’t provide evidence that the gross amounts received for their services included service tax, making them liable for further deduction. A review petition against this order was also dismissed on September 22nd, 2017.

Initially, the Original Authority confirmed the service tax liability and imposed penalties on the appellant under Sections 77 and 78 of the Finance Act, 1994. However, the appellant contested this decision, leading to the Commissioner (Appeals) accepting their claim on March 15th, 2011, and overturning the Original Authority’s order.

However, the Tribunal partially reversed the Commissioner’s (Appeals) order, as mentioned earlier.

Upon review, the main question at hand was whether the appellant had adequate supporting evidence to prove that the considerations they received included service tax. The appellant’s counsel argued that they had presented sufficient documentary evidence to support their claim before both the Commissioner (Appeals) and the Adjudicating authority. They also expressed readiness to provide such evidence to the Tribunal.

The respondent-revenue’s counsel did not oppose this offer.

In light of this, the appeals were partially allowed, and the Tribunal set aside its earlier order dated January 5th, 2017, concerning question (c). The case was remitted back to the Tribunal for fresh adjudication of the said question, considering any relevant material or documents provided by the parties.

Both parties were directed to appear before the Tribunal on March 14th, 2023, for further proceedings.

The case involves the Customs, Excise and Service Tax Appellate Tribunal (referred to as the ‘Tribunal’) issuing an order on January 5th, 2017, which accepted the revenue’s argument that the appellant failed to provide evidence supporting their claim that the gross amounts received for their services included service tax, thus making them eligible for further deduction under Section 67(2). A review petition against this order was dismissed on September 22nd, 2017.

Initially, the Original Authority confirmed the service tax liability on the appellant and imposed penalties under Sections 77 and 78 of the Finance Act, 1994. However, the appellant contested this decision, and the Commissioner (Appeals) ruled in their favor on March 15th, 2011, overturning the Original Authority’s decision.

The Tribunal partially reversed the Commissioner’s (Appeals) order, leading to the current appeal.

After hearing arguments from both parties and reviewing the case records, the main question at hand is whether the appellant has sufficient evidence to prove that the considerations they received included service tax. The appellant’s counsel claims they provided enough documentary evidence to support this claim to both the Commissioner (Appeals) and the Adjudicating authority. They express readiness to present this evidence again for the Tribunal’s consideration.

The respondent-revenue’s counsel did not object to this offer.

Considering the situation, the appeals are partly allowed. The Tribunal sets aside its previous order pertaining to question no. (c) and remits the case for fresh adjudication, instructing the Tribunal to consider any relevant material or documents provided by the parties.

Both parties are directed to appear before the Tribunal on March 14th, 2023. It’s emphasized that no opinion on the merits of question no. (c) has been expressed.

Overall, the appeals are partly allowed based on the above considerations, and any pending applications are disposed of accordingly.

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