The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the penalty of Rs. 31 lakh penalty on real estate contractors for non-registration under service tax in labour supply to builders.
The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the appellant/contractor had received Rs. 3,02,90,638 during the period 2009-2012 and no satisfactory explanation was offered by the appellant.
The appellants was engaged in providing “Construction of Residential Complex service services to various builders and developers, Jodhpur. Intelligence was received that the appellant was not paying service tax on the taxable services provided by them.
During the course of investigations, itendra Panwar appeared before the Superintendent(AE), Central Excise Division, Jodhpur and stated that there company has been operating since 2011 and undertaking the work on Labour Rate contract basis. He stated that they had worked for M/s Manav Developers only and submitted a copy of the agreement.
On completion of investigations, the department issued Show Cause dated 14.10.2014 demanding service tax of Rs.31,19,937 under Section 73(1) of the Finance Act, 1994 along with interest under section 75 and proposing penalty under Section 77 and 78 of the Finance Act, 1994.
The Assistant Commissioner decided the matter ex-parte and issued the Order confirming demand of Rs.31,19,937 along with interest under Section 75 and penalty under section 77 and 78 of the Finance Act, 1994. The Commissioner (Appeals) also passed the order. The appeal has been filed.
The tribunal noted that the department had examined the agreement between the appellant and M/s Manav Builders and arrived at the conclusion that the appellant had not provided material along with the labour service. This is substantiated by the Nil VAT returns filed by the appellant. Consequently, the appellant was not eligible to any abatement from the gross amount received for the services rendered by them.
The tribunal held that no evidence has been produced in support of the appellant’s contention.
Case Details
Case Title: M/s Panwar Builders Versus Commissioner of Central Goods, Service Tax, Central Excise, Udaipur
Case No.: Service Tax Appeal No. 53503 Of 2018
Date: 16.05.2025
Counsel For Appellant: None
Counsel For Respondent: Anand Narayan
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