2016 (6) TMI 1281 - AT - Service Tax

Classification of services - monetary amount involved in the appeal - Held that - this appeal has been dismissed under Litigation Policy as the service tax involved is less than ₹ 10,00,000/- (Rupees Ten Lakhs only) and by following the instructions F.No. 390/Misc./163/2010-JC dated 17.12.2015 as reported vide letter dated 01.01.2016 - dismissal of a case under Litigation Policy will not be a precedent for future cases - application for restoration of appeal dismissed.

Summary

Issues:
- Restoration of appeal dismissed summarily under Section 86 of the Finance Act 1994.
- Classification of taxable service as 'Management or Maintenance or Repair Service' or 'Works Contract Service'.

Analysis:
1. The judgment pertains to a miscellaneous application filed by the Revenue for the restoration of an appeal that was dismissed summarily under Sub-section (6A) (b) of Section 86 of the Finance Act 1994. The appeal was initially filed against Order-in-Appeal No. 128/2008 dated 28.08.2008 passed by the Commissioner (Appeals) Bangalore. The Tribunal had dismissed the appeal based on the Board's instructions due to the service tax amount involved being less than the prescribed threshold limit of ?10,00,000. The main issue in this case revolves around the classification of the taxable service provided by the respondent. The Revenue classified the service under 'Management or Maintenance or Repair Service,' while the respondent argued that it should be considered as 'manufacture' or 'Works Contract Service.'

2. The learned AR contended that the Tribunal's order was erroneous as the service in question fell under an exception to the circular dated 17.12.2015, thus not covered by the policy leading to dismissal. On the contrary, the respondent's counsel opposed the restoration application, emphasizing that the classification of the service was not in dispute, and the Commissioner had not provided any specific finding on it. The respondent argued that the issue was not covered by the exception in the circular dated 17.12.2015.

3. After hearing both parties and reviewing the records, the Tribunal noted the absence of a specific finding on the classification by the Commissioner. The dismissal of the appeal was based on the Litigation Policy due to the service tax amount being below the threshold, following the instructions dated 17.12.2015. It was clarified that such dismissals under the Litigation Policy do not set a precedent for future cases.

4. Ultimately, the Tribunal concluded that the appeal did not warrant restoration, leading to the dismissal of the restoration application. The judgment highlights the importance of proper classification of taxable services and the application of Litigation Policies in determining the course of legal proceedings.