M/S.Reliance Engineering Services vs. The Commissioner

Held

The Court, after considering the submissions of both parties and noting the petitioner's willingness to comply with reasonable terms, decided to set aside the impugned order. The case was remitted back to the first respondent for fresh adjudication on merits and in accordance with law. This decision was made subject to the condition that the petitioner deposits 50% of the disputed tax within four months, payable in four equated monthly installments. The Court reasoned that this approach would allow for a proper adjudication of the petitioner's claims regarding exemptions. If the petitioner fails to comply with the deposit condition, the respondents are at liberty to proceed as if the impugned order had never been set aside and the writ petition had been dismissed. The issue of cross-examination of the third respondent and the VCES-1 declaration were implicitly to be considered during the re-adjudication.

Facts

The petitioner, M/s. Reliance Engineering Services, filed a writ petition challenging Order-in-Original No.04/COMMR/ST/2016 dated 28.03.2016, passed by the first respondent/Commissioner. This order confirmed a demand proposed in a show cause notice dated 26.12.2014. The dispute pertains to the period between April 2008 to December 2012. The petitioner had previously attempted to settle the case under the Voluntary Compliance Encouragement Scheme, 2013, but failed to pay the required amount. Subsequently, statements were recorded, leading to the issuance of the show cause notice and the impugned order. The petitioner sought to quash the order and requested a re-adjudication after being afforded an opportunity to cross-examine the third respondent and to pass an appropriate order on a VCES-1 declaration dated 31.12.2023.

Key Issues

1. Whether the petitioner is entitled to exemption from Service Tax in terms of Notification No.23/2009-ST dated 07.07.2009 and Notification No.12/2012-ST dated 01.07.2012, and also exempted from Excise Duty under Notification No.3/2005-Central Excise dated 24.02.2005, as argued by the petitioner? The petitioner contended that the impugned order wrongly denied these benefits and failed to recognize that their activities were limited to fabrication for construction work. 2. Whether the Writ Petition is liable to be dismissed on grounds of latches and delay, as argued by the respondents, citing the Supreme Court decisions in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited and Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others?