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CESTAT : Third Member follows LB ruling; Works contract divisible pre-2007; Invokes extended limitation

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Third Member of CESTAT rules in Revenue’s favour, composite works contract can be vivisected even prior to June 1, 2007 & service portion discernible therein can be subjected to service tax under “erection, commissioning & installation service” category, as has been held by 5-Member Bench in assessee’s own case; Concurs with Member (Technical) that extended limitation period is invokable in present case, relies on co-ordinate bench ruling in Dewas Metal Section Ltd which held that failure to disclose any fact in ER-1 Returns necessary to enable Assessing Officer to ascertain correctness of self-assessed tax amounts to suppression of fact with intent to evade duty; Rejects assessee’s claim of bona fide belief owing to uncertainty over liability of works contract prior to June 2007, states that said plea does not hold much water particularly after insertion of clause (29A) in Art. 366 vide 46th Constitutional amendment, and ensuing apex court judgements holding that works contract can be split up for service tax levy; Also refutes assessee’s reliance on Daleim Industrial Co. Ltd. ruling which related to service tax on “consulting engineer service” introduced in 1998, notes that erection, commissioning & installation constituted major / dominant component of assessee’s lump sum turnkey contracts and therefore, assessee’s stand of indivisibility, untenable; Assessee ought to have, at least, indicated details of services believed to be non-taxable in ST-3 Returns, such failure to furnish correct particulars in returns certainly amounts to wilful mis-statement and suppression of material fact attracting extended period of limitation  : Mumbai CESTAT

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