Brijesh Ajitbhai Oza vs Commissioner Of Central Excise And Service Tax - CGST & Central Excise Rajkot

Ramesh Nair, Member (J)

The present appeal is preferred against Order-In-Appeal No. BHV-EXCUS-000-APP-264-2023 dated 27.07.2023 passed by the Commissioner (Appeals) of GST and Central Excise, Rajkot by which service tax demand of Rs. 4,40,838 under section 73 (1) of the Finance Act, 1994 has been upheld.

1.1 Facts in brief are that appellant herein is engaged in full-time service with M/s. Cairn Energy India Ltd at its Balmer (Rajasthan) office as “Consultant – Logistic Services’. It is the case of department, based on Income tax returns/Data accessed from the Income Tax Department, that appellant provided the taxable services and received income of “consultant – Logistic Services” from the above entity during the period 2014-15 upto June 2017, however failed to obtain service tax registration and pay service tax thereon.

Shri Rahul Gajera, learned counsel appearing on behalf of appellant, vehemently argued that in first place Assistant Commissioner, Bhavnagar-I had no jurisdiction to demand service tax for services if any provided at Balmer in Rajasthan. Reliance in this behalf was placed on the following decisions:

• Supermax Personal Care P. Ltd Vs. Union of India – 2021 (377) E.L.T 399

• B. L. Mehta Construction Co. P. Ltd Vs. CST- 2018 (8) G.S.T.L 92

• Transocean Offshore Vs. Union of India – 2017 (356) E.L.T 45 (AP).

2.1 It was further submitted that show cause notice is barred by limitation provided under proviso to section 73 (1) of the Act and the only basis for invoking extended period in the show cause notice is that appellant failed to obtain registration and pay service tax which cannot be equated with willful suppression of facts. In this behalf he relied upon the following decisions:-

• Collector of central Excise Vs. Chemphar Drugs & Liniments – 1989 (40) E.L.T 276 (S.C.)

• Commr. Of Service Tax, Bangalore-I Vs. Karnataka Udyog Mitra – 2020 (35) G.S.T.L. 382 (Kar.)

• Padmini Products Versus Collector of C. Ex. – 1989 (43) E.L.T. 195 (S.C.)

2.2 It is his submission, that appellant held bonafide belief that his engagement with his employer is not subjected to service tax and that he was treated as employee during the period in question and hence element of “service” as per the provisions of Finance Act are absent. He relied upon Employee ID Card, Health Insurance Card, Awards etc in his behalf.

Shri H P Shrimali learned Superintendent (AR) appearing on behalf of Revenue, argued that income was booked in Form 26AS under section 194J of the Income Tax Act which denotes fees for professional or technical services and that department came to know about the such services provided only by way of access of Data/Returns from Income Tax Department and hence extended period is rightly invoked.

I have carefully considered the submissions made by both the sides and perused the records. It is observed that appellant was engaged in full-time services with M/s. Cairn Energy India Ltd at Balmer office in Rajasthan, the taxable services if any is also provided at Balmer in Rajasthan. Demand of Service tax is confirmed by Order of Assistant Commissioner, Bhavnagar-I who has no jurisdiction to demand tax at Balmer in Rajasthan. Reliance in this behalf is placed in the case of B. L. Mehta & Co., the relevant para is extracted herein:-

“6. In this case, at the time of the execution of work, the appellant was not registered with the Central Excise/Service tax department. In that circumstance, the jurisdiction falls where the appellant has executed the work. Admittedly, in this case, the work has been executed at Chandigarh, therefore, the cause of action arose at Chandigarh and the Commissioner of Central Excise, Chandigarh-II has no jurisdiction for the work executed at Chandigarh. In that circumstance, the adjudicating authority has no jurisdiction to adjudicate the impugned show cause notice. Therefore, the impugned order is not sustainable in the eyes of law.”

As per the above discussion, the demand of service tax is without jurisdiction. Impugned Order is therefore liable to be set aside. Accordingly, I set aside the impugned order and allow the appeal with consequential relief as per law.