R. N. Agarwal vs Agra

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD

REGIONAL BENCH - COURT No. I

Service Tax Appeal No.70259 of 2026

(Arising out of Order-in-Appeal No.68-ST/APPL/LKO/2026 dated 13.03.2026
passed by Commissioner (Appeals) Customs, CGST & Central Excise, Lucknow)

Shri R. N. Agarwal, …..Appellant
(D-5, Basant Vihar,
Kamla Nagar, Agra-282005)
VERSUS
Commissioner of Central Excise &
CGST, Agra ….Respondent
(113/4, Sanjay Place, Agra-282002, U.P.)
A PPEARANCE :
Smt. Stuti Saggi, Advocate for the Appellant
Shri Surendra Ram, Authorized Representative for the Respondent

CORAM:
HON’BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)

FINAL ORDER NO.- 70490/2026

DATE OF HEARING : 21.07.2026
DATE OF PRONOUNCEMENT : 28.10.2026

SANJIV SRIVASTAVA:


This appeal is directed against Order-in-Appeal No.68-
ST/APPL/LKO/2026 dated 13.03.2026 of the Commissioner
(Appeals) Customs, CGST & Central Excise, Lucknow. By the
impugned order the Order-in-original No.12/ST/JC/Agra/2025-26
dated 29.08.2025 holding as follows has been modified to the
extent stated in the order:
“ORDER
(i) I confirm the demand of Service Tax amounting to
Rs.1,45,14,751/- (Rupees One Crore Forty Five Lakh
Fourteen Thousand Seven Hundred and Fifty One Only)
(including all cesses) which is demandable and recoverable
from the party under proviso to Section 73(1) of the Finance
Act, 1994 read with Section 174 of CGST Act, 2017.

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(ii) I confirm the amount of interest on the amount of service
tax confirmed in (i) above, at the appropriate rate, upon the
party from the due date of payment of Service Tax till the
actual date of payment of service tax, under Section 75 of
the Act ibid read with Section 174 of CGST Act, 2017.
(iii) I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand
Only) upon the party under Section 77(1)(a) of the Finance
Act, 1994 read with Section 174 of CGST Act, 2017 for
failure to takeout service tax registration.
(iv) I impose a Late fee of Rs.40.000/- upon the party under
Section 70 of the Finance Act, 1994 read with Section 174
of CGST Act, 2017 for failure to file ST-3 for the period April,
2015 to September, 2015, October, 2015 to March, 2016,
April, 2016 to September, 2016, October, 2016 to March,
2017,
(v) I impose penalty each of Rs. 10,000/-(Rupees Ten Thousand
Only) upon the party under Section 77(1)(c)(i) & (ii) of the
Finance Act, 1994 read with Section 174 of CGST Act, 2017
for failure to furnish information/documents as required by
the CGST/Central Excise Officer.
(vi) I impose penalty of Rs. 1,45,14,751/- (Rupees One Crore
Forty Five Lakh Fourteen Thousand Seven Hundred and Fifty
One Only) upon the party under Section 78 of the Finance
Act, 1994 read with Section 174 of CGST Act, 2017.”
2.1 The appellant, having PAN AAJFR1090C was not registered
with the service tax department but engaged in providing taxable
services to Government Departments and others.
2.2 During the course of scrutiny of the information received
from Income Tax Department i.e. Form 26AS etc., it was noticed
that the appellant had not paid Service tax on the value of services
amounting to Rs.2,77,00,439/- for 2015-16 and Rs.6,99,87,916/-
for 2016-17 total amounting to Rs.9,76,88,355/-. The amount of
service tax due from the appellant against these receipts as
reported by Income Tax department is as per the table below:

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(Amount in Rs.)
Financial Year 2015-16 2016-17 TOTAL
Gross Receipts towards services
Third party Data
2,77,00,439 6,99,87,916 9,76,88,355
Rate of Service Tax (%) 14.50
Service Tax payable 40,16,563 1,04,98,187 1,45,14,751
2.3 Enquiries/ investigations were mad from the appellant and
he was vide letters dated 19.04.2021 and 22.04.2021 was asked
to provide the requisite documents and explanation for not
payment of the service tax as above. Appellant did not respond to
the communications made.
2.4 A show cause notice dated 28.04.2021 was issued to them
asking to show cause as to why:-
i. Service Tax amounting to Rs. 1,45,14,751/-/-(Rupees One
Crore Forty Five Lakh Fourteen Thousand Seven Hundred
and Fifty One only) including all cess should not be
demanded and recovered from them under Section 73(1)
of Finance Act, 1994 read with Section 174 of CGST Act,
2017.
ii. Interest on the above amount demanded amount should
not be charged and recovered under Section 75 of Finance
Act, 1994 read with Section 174 of CGST Act, 2017.
iii. Penalty should not be imposed upon them under Section
78 of the Finance Act, 1994 read with Section 174 of CGST
Act, 2017.
iv. Penalty should not be imposed upon them under Section
77(1)(a) of Finance Act, 1994 read with Section 174 of
CGST Act, 2017 as the party failed take registration in
Service Tax.
v. Penalty should not be imposed upon them under Section
77(1)(c) (i) and (ii) of the Finance Act. 1994 read with
Section 174 of CGST Act, 2017 in as much as the party
failed to provide the information/documents as called by
the Central Excise Officer.
vi. Late fee for non filing late filing of service tax returns as
discussed above, should not be demanded and recovered

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as per the provisions of Rule 7C of the Service Tax Rules.
1994 rend with Section 70 of the Act ibid and further read
with Section 174 of CGST Act, 2017.
2.5 The show cause notice was adjudicated as per the order in
original referred in para 1 above.
2.6 Aggrieved appellant filed the appeal before Commissioner
(Appeal) which has been partly allowed and the order in original
modified as indicated in the impugned order.
2.7 Aggrieved appellant has filed this appeal.
3.1 I have heard Ms. Stuti Saggi for the Appellant and Shri
Surendra Ram Authorized Representative for the revenue.
3.2 Arguing for the appellant learned counsel submits that
extended period of limitation could not have been invoked for
making this demand as the appellant had not suppressed any
information with intention to evade the payment of service tax.
Reliance is placed on the following decisions:
➢ Quest Engineers & Consultants Pvt Ltd. [2022 (58) GSTL
345 (T-ALL)]
➢ Mega Trends Advertising Ltd. [2020 (38) GSTL 57 (T-ALL)]
➢ ACE Creative Learning Pvt. Ltd. [2021 (51) GSTL 393 (T-
Bang)]
➢ Shankar Advertizing Agency [Final Order No 71614/2019
dated 30.08.2019 in S T Appeal No 71003 of 2016]
➢ Massarrat Ali Khan [Final Order No 70819/2025 dated
19.11.2025 in S T Appeal No 70711 of 2025]
➢ Rajendra Kumar Gupta [Final Order No 70055/2026 dated
20.01.2026 in S T Appeal No 70761 of 2025]
3.3 Authorized representative re-iterated the findings recorded
in the impugned order.
4.1 I have considered the impugned order along with the
submissions made in appeal and during the course of arguments.
4.2 During the period in dispute appellant has provided services
as detailed in the table below and have received the consideration
as indicated.

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S.N Name of the source of Income 2015-16 2016-17
1 Agra Development authority 6856142 0
2 Ex. Engineer, UP AVAS & VIKAS
Parishad
3544007 13803492
3 Ex. Engineer, PD/PWD Hathras 6287701 1397334
4 Ex. Engineer Construction Div I
TTZPWD Agra
421593 0
5 PWD 4249834 0
6 Cosmos Infrastructure Services P Ltd. 1734694 0
7 EMS Infracon Pvt.Ltd. 510204 999975
8 RG Buildwell Engineering Ltd. 3424000 0
9 Superintending Engineer PWD Circle
Dholpur
672264 0
10 Firozabad Shikohabad Development
Authority
0 884792
11 Madan Lal Bansal Company Contractor 0 1713970
12 Construction Div.I, PWD Orai 0 18192392
13 Construction Div.3, PWD Orai 0 32995961
Total 27700439 69987916
Service Tax @% 14.5 15
Service Tax Demanded as per Show
Cause Notice
4016563 10498187
4.3 The adjudicating authority has found above two amounts
received by the appellant from various government
departments/clients did not qualify for any exemption under the
service tax therefore confirmed the Service tax demand along with
interest and penalties as indicated in order in original refer para 1
above.
4.4 Impugned order set aside measure portions of the demand
observing as follows:
“5.2 It has been noticed that the adjudicating authority has
issued single Demand SCN for the period 2015-16 and
2016-17 wherein information shared by the Income Tax
department has been consolidated in a single Demand SCN
involving four service Tax return periods namely April'15-
Sept'15, Oct'15-March'16, Apr'16-Sept'16 and Oct'16 to
March'17 and all four returns have their due date of filing
and the counting of relevant date for issuing Demand SCN
for the specific period depends upon the same. Going by the

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submissions made by the appellant in their grounds of
appeal in the instant matter I am taking up the impugned
order financial year wise. Firstly, I take up the Service tax
demand confirmed by the adjudicating authority on the
amount of receipt Rs. 2,77,00,439/- from the various
government as well as private clients for providing the
services of various Construction works and other activities
during the financial year 2015-16. In the impugned order,
demand of Service tax amounting to Rs. 40,16,563/-for the
period 2015-16 was confirmed against the appellant. The
appellant argued that the demand of service tax for the
period 2015-16 is time barred as the said show cause was
served upon the appellant after 28.04.2021 i.e. after the
date as prescribed by the Board vide its Circular No.
296/07/2016-C.X-9 dated 25.04.2016 by which period for
filing ST-3 for the period Oct 2015 to March 2016 has been
extended from 25.04.2016 to 29.04.2016. Therefore the
last date of service of SCN under extended period proviso
was 'Five Years' time ending on 28.04.2021. The
Adjudicating authority erred in considering this lapse while
deciding the case and assumed date of receipt of impugned
demand SCN as 28.04.2021 by communicating the same on
e-mail id in terms of Section 169 of the CGST, Act, which is
otherwise not applicable in case of service tax matters.
Actual mode of service of notice has been prescribed under
Section 37C of the Central Excise Act, 1944 as made
applicable to Service tax matters vide Section 83 of the
Finance Act, 1994.
5.3 In this regard, it is necessary for me to go through the
provisions of Section 37C of the Central Excise Act, 1944
which is reproduced as below:
1) Any decision or order passed or any summons or
notices issued under this Act or the rules made there
under, shall be served,.

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a) by tendering the decision, order, summons or notice,
or sending it by registered post with acknowledgment
due, or by speed post with proof of delivery or by
courier approved by the Central Board of Excise and
Customs constituted under the Central Boards of
Revenue Act, 1963 (54 of 1963) to the person for
whom it is intended or his authorized agent, if any;
b) if the decision, order, summons or notice cannot be
served in the manner provided in clause (a), by
affixing a copy thereof to some conspicuous part of
the factory or warehouse or other place of business or
usual place of residence of the person for whom such
decision, order, summons or notice, as the case may
be, is intended;
c) if the decision, order, summons or notice cannot be
served in the manner provided in clauses (a) and (b),
by affixing a copy thereof on the notice board of the
officer or authority who or which passed such decision
or order or issued such summons or notice.
(2) Every decision or order passed or any summons or
notice issued under this Act or the rules made there
under, shall be deemed to have been served on the date
on which the decision, order, summons or notice is
tendered or delivered by post or courier referred to in
sub-section (1) or a copy thereof is affixed in the manner
provided in sub-Section (1).
5.4 Ongoing through the impugned order, I find that the
Adjudicating authority has not discussed and justified the
issue and service of the Demand SCN at any stage which
has been attempted to serve upon the appellant in
accordance with the provisions of Section 169 of the CGST
Act, 2017. I notice that the provisions of Section 169 of the
CGST, Act, 2017 is applicable only for the notices issued
under the CGST, Act, 2017 or Rules made there under, and
not in the matter of Service tax. Therefore, I am of the
opinion that the department has to serve the notice by any

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mode as prescribed under Section 37C of the Central Excise
Act, 1944 as made applicable to Service tax matters vide
Section 83 of the Finance Act, 1994 as discussed above. I
find nowhere under Section 37C of the Central Excise Act
prescribes the mode of service of notice by e-mail. The
appellant has also submitted that the impugned SCN was
dispatched through Speed Post No. EU229606974IN dated
25.05.2021 from Range Etawah at S.No.83 dated
25.05.2021 to the appellant which was delivered on
03.06.2021. In order to support of their claim, the appellant
has also produced the photo copy of the envelop received
through the postal authorities containing the impugned
Demand SCN.
5.5 Considering the facts as discussed above, I find that the
actual date of service of the impugned show cause notice to
the appellant is 03.06.2021 instead of 28.04. 2021. Thus, I
find that the impugned show cause notice had been served
after the expiry of Five Years' from the relevant date i.e.
29.04.2016, the date of filing of ST3 return for the period-
Oct'15 to March'16. Hence, the impugned show cause notice
is hit by limitation clause and the same is time barred for
the financial year 2015-16. Accordingly, the impugned
Demand show cause notice for the period 2015-16 was not
eligible for taking cognizance and the Order in Original
passed by confirming the service tax amount for the period
2015-16 raised vide said Demand show cause notice
deserves to be set aside.
5.6 As regards the consideration of Rs. 6,99,87,916/-, as
shown in their Form 26AS for the period 2016-17 and
confirmed by the adjudicating authority in the impugned
order, I find that the appellant has produced a copy of all
relevant documents pertaining to their contracts entered
with their clients as detailed hereunder and the nature of
services rendered to them against the receipts of Rs.
6,99,87,916/- during the period 2016-17;

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S.N Name of the source of
2016-17 Nature of services performed against
contract entered with the clients
Income
1 Ex. Engineer, UP AVAS &
VIKAS Parishad
1,38,03,492 Road Construction, strengthening of
road
2 Ex. Engineer, PD/PWD
Hathras
13,97,334 Road Construction, strengthening of
road
3 EMS Infracon Pvt. Ltd. 9,99,975 Supply of Hot mix plant, paver
machine and other accessories on rent
basis
4 Firozabad Shikoha
Development Authority
8,84,792 Construction of Drain under MKJSGA
scheme
5 Madan Lal Bansal
Company Contractor
17,13,970 Supply of Hot mix plant, paver
machine and other accessories on rent
basis
6 Construction Div. I, PWD
Orai
1,81,92,392 Bilraya Panwadi SH No.21 road repair
activity and cement concrete road
repair
7 Construction Div.3, PWD
Orai
3,29,95,961 Babai damrara and Bhata Rajwah
sampar Marg
Total 6,99,87,910
On examination of the above contracts entered by the
appellant with their clients it is amply clear that the
appellant has performed construction and repair of Road,
Nali and drains for various government departments in the
interest of general public which were exempted for payment
of service tax in terms of entry No.13(a) and 12(e) of the
Mega Exemption Notification No.25/2012-ST dated
20.06.2012 as amended except the following,
1 EMS Infracon Pvt. Ltd. 9,99,975 Supply of Hot mix plant, paver machine
and other accessories on rent basis
2 Madan Lal Bansal
Company Contractor
17,13,970 Supply of Hot mix plant, paver machine
and other accessories on rent basis
Total 27,13,945
The appellant has received Rs. 27,13,945/- for which no
service tax was either charged by the appellant or given to
them by their clients therefore the appellant is eligible to
cum tax value benefit in terms of Section 67(2) of the
Finance Act'1994 for this renting of equipment Services
which is specifically defined as Supply of Tangible Goods
Services and the appellant is liable to pay Service Tax @
15% for this taxable consideration. Accordingly, the
appellant is liable to pay Service tax as per following

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calculation on the gross receipt of Rs. 27,13,945/- for the
period 2016-17;
Gross value 27,13,945
Net taxable Value in terms of Section 67(2) as cum tax benefit for Service
Tax rate @ 15%
23,59,952
Service Tax payable @15% 3,53,993
Therefore, the appellant was liable to pay Service tax
amounting to Rs, 3,53,993/- on the consideration of Rs.
27,13,945/- against the services rendered by them to their
client for the period 2016-17. The appellant is required to
pay interest on the said amount of Service tax at the
applicable rate and mandatory penalty equal to the said
amount of Service tax under Section 78 of the Act, ibid.
5.7 I find that the appellant despite being registered with
the department for providing taxable services to their
customers, had failed to file ST-3 with the department and
suppressed the above mentioned facts from the department
with an intent to evade payment of Service tax due thereon.
Therefore, the clause of extended period of limitation was
rightly invoked in the impugned order.
5.8 As the penalty under Section 78 of the Act, ibid has
already been imposed upon the appellant as mentioned
above, I vacate the penalty imposed upon them under
Sections 77(1)(a) & 77(2) of the Act, ibid.
6. The impugned order is modified to the above extent and
the appeal filed by the appellant is disposed of accordingly.
4.5 Thus impugned order has set aside the entire demand
excepts for the demand made in respect of receipts from M/s EMS
Infracon Pvt. Ltd. & Madan Lal Bansal Company Contractor.
Counsel for the appellant had during the course of arguments
labored to submit that these two receipts were also in respect of
provision of services to Government authorities for construction/
maintenance of roads and hence exempt from payment of service
tax. The submissions made by the Counsel are contrary to the

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agreements entered between the appellant and service recipient.
The agreements/ contracts are reproduced below:

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4.6 From perusal of the above agreements it is evident that
these agreements are in respect of Supply of Tangible Goods
against a mutually agreed consideration. These services do not
fall under the category of exempted services under any of the
clauses of exemption notification no.25/2012-ST dated
20.06.2012. The impugned order holding so cannot be faulted
with.
4.7 During the course of arguments of the appeal the counsel
for appellant referred to Notification No.33/2012-ST and
submitted that benefit of the threshold exemption should be
allowed to the appellant. I do not find force in the argument
advanced the taxable turnover of the appellant as per the
appellants own submissions during the financial year 2015-16
would be as follows:
Supply of Hot mix plant, paver machine and other accessories
on rent
2015-16
S No Service Recipient Gross
Receipts
1 RG Buildwell Engineering Ltd. 3424000
2 EMS Infracon Pvt.Ltd. 510204
Total 3934204
As the Gross Receipts of the appellant against the taxable services
during the Financial Year 2015-16 is Rs 39,34,204/- much more
than prescribed limit of Rs 10,00,000/-, the benefit of this
exemption cannot be extended to the appellant for Financial Year
2016-17.
4.8 On the issue of limitation I observe that appellant was not
registered with the department and was not filing any returns
during the period of dispute. No plausible explanation has been
put forth by the appellant for the not registering and complying
with the provisions of Finance Act, 1994 when they were providing
taxable services of value much exceeding the threshold exemption
limit. The intention to evade payment of duty is but obvious and
has on account non registration and non disclosure resulted in
nonpayment of service tax due. Here I would observe that though
the demand for year 2015-16 has been held time barred it cannot
be said that appellant had short paid the service tax during that

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period too in respect of the supply of tangible goods services
provided by them.
4.9 The decisions referred by the appellant in their appeal and
during the course of arguments are distinguishable. The decision
in the case of Mega Trends Advertising Ltd., ACE Creative Learning
Pvt. Ltd., Shankar Advertising Agency & Quest Engineers &
Consultancy Pvt. Ltd. all are in case of the persons who were duly
registered with the department whereas in the present case the
appellant was not registered with the department and was not
filing any return. The case of Rajendra Kumar Gupta & Massarat
Ali Khan were the case wherein appellant therein were able to
show that that they entertained a bonafide belief that they were
not require to pay any service tax. Taking note of their bonafide
belief the demands were se aside. In this case appellant has not
even pleaded bonafide belief or have been able to show
conclusively that such bonafide belief existed. Impugned order
records the finding of fact that appellant had suppressed the
relevant facts with intent to evade payment of due service tax.
Thus extended period has been rightly invoked for making this
demand.
4.10 As I find that the demand made by invoking the extended
period of limitation as per proviso to Section 73 (1) cannot be
faulted with the penalty under Section 78 follows naturally as has
been held by Hon’ble Supreme Court in the case of Rajasthan
Spinning and Weaving Mills Ltd. [2009 (238) ELT 3 (SC)].
4.11 Thus I do not find any merits in this appeal.
5.1 Appeal is dismissed.

(Order Pronounced in Open Court on - 28.10.2026 )

Sd/-
(SANJIV SRIVASTAVA)
MEMBER (TECHNICAL)
LKS