Benefit Of Abatement Notification Can't Be Denied Merely For Mismatch In Quantum Of Purchase: CESTAT

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the benefit of abatement notification cannot be denied solely because of a difference in the amount of purchase shown in the profit and loss account and invoices.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical) has observed that Notification No. 15/2004-ST or, for that matter, 01/2006-ST, does not require proof of purchase of raw material to the extent of the abatement. Hence, denying the benefit of the notifications for the reason that the quantum of purchase shown in the profit and loss account does not match the invoices produced by the appellant was improper and incorrect.

The issue involved was whether the appellant was entitled to the benefit of Notification No. 15/2004-ST for the periods 2005-06 and 2007-08. The benefit has been denied by the Commissioner (Appeals) on the ground that the appellant has failed to produce any evidence of the purchase of material in respect of which deduction has been claimed under Notification No. 15/2004-ST or 1/2006-ST.

As per Notification No. 15/2004-ST, the government exempted the taxable service provided by a commercial concern to any person, in relation to construction services, from so much of the service tax leviable under section 66. In excess of the service tax, calculated on a value which is equivalent to 30% of the gross amount charged to any person by any commercial concern for providing the taxable service.

The CESTAT allowed the appeal by way of remand to the original adjudicating authority for the purpose of recalculation the demand.

Case Title: Jay Gurudev Construction Co Versus C.C.E. & S.T.-Rajkot

Citation: Service Tax Appeal No. 213 of 2011

Date: 20.10.2022

Counsel For Appellant: None

Counsel For Respondent: Superintendent (Authorised Representative) R. P Parekh

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