2013 (12) TMI 1521 - AT - Service Tax

Summary

Issues involved: Appeal against Service Tax demand, disallowed Cenvat credit, recovery of disallowed Cenvat credit, interest, and penalties.

Service Tax Demand: The appellant appealed against an adjudication order confirming a Service Tax demand of Rs. 5,56,15,882, disallowing Cenvat credit of Rs. 1,73,85,377, directing recovery of disallowed Cenvat credit availment of Rs. 1,22,53,815, appropriating Rs. 48,84,111 already remitted by the appellant towards the assessed Service Tax liability, and imposing interest and penalties.

Initiation of Proceedings: Proceedings were initiated based on a show cause notice indicating that the appellant was providing construction of "residential complex" service without proper registration, filing returns, or remitting Service Tax due for the period from 1-11-2006 to 30-9-2010.

Defenses Raised: The appellant raised defenses including involvement in construction of residential apartments, transfer of property in goods, classification under "works contract" service u/s 65(105)(zzzza) of the Finance Act, benefits of composition under the Works Contract (Composition Scheme of Payment of Service Tax) Rules, 2007, and reference to Board circulars for guidance on classification and availment of benefits.

Adjudication Authority's Conclusion: The Authority concluded that the service provided cannot be classified as works contract service even if it falls within the scope of the later category, based on registration under construction of residential complex service and remittance of Service Tax under that category. The Authority held that the gross amount charged for providing the service would be the amount liable to the levy of Service Tax.

Irregular Availment of Cenvat Credit: The appellant was alleged to have irregularly availed and utilized Cenvat credit in contravention of Rule 9 of Cenvat Credit Rules, 2004. The appellant failed to produce documentary evidence in support of the availment of credit, leading to a finding of irregular availment of Cenvat credit.

Judgment: The Tribunal quashed the adjudication order, waiving pre-deposit and allowing the appeal, citing the obligation of the adjudicating authority to properly classify the service provided and the necessity to analyze the characteristics of the service in terms of the provisions of the Act for accurate classification.