2010 (8) TMI 478 - AT - Service Tax

Demand - collection of service tax from sub contractor where main contractor has paid the service tax - the show-cause notice had proposed demand of service tax under different categories, Erection, Commissioning and Installation services, Maintenance and repair services and Construction services - Held that - matter is to be remanded to original adjudicating authority for fresh decision after giving a reasonable opportunity to the appellants to present their case.

Summary

Issues:
1. Liability of contractor or sub-contractor and relationship with main contractor.
2. Claim for exemption under Notification No. 67/95 for fabrication not amounting to manufacture.
3. Claim for abatement and treatment of amount received as cum-service tax.
4. Claim of bona fide belief based on relevant case law.

Analysis:

1. The judgment discusses the case of M/s. Aneri Constructions, a firm engaged in various construction activities. The firm was investigated for non-payment of service tax under different categories like Maintenance and Repair Services, Manpower Recruitment, Erection, Commissioning or Installation Services, and Construction services. The appellants argued that they were rendering different services and that the definition of certain services had changed in 2006. They also claimed to be sub-contractors and not liable for service tax in certain situations. The Tribunal noted that various aspects related to the liability of the contractor or sub-contractor, the nature of the contract, and the definition of services had not been adequately considered by the Commissioner.

2. Another issue raised was the claim for exemption under Notification No. 67/95 for fabrication work not amounting to manufacture. The appellants argued that the fabrication work was labor-intensive and did not qualify as manufacturing, thus exempt from service tax. They cited relevant case law to support their claim, emphasizing that the Commissioner had not properly considered this aspect. The Tribunal acknowledged that this claim required further examination and directed the matter to be remanded for a fresh decision.

3. The judgment also addressed the appellants' claims for abatement and the treatment of amounts received as cum-service tax. The appellants contended that their claims for abatement had been unjustly rejected without sufficient grounds. They further argued for the treatment of certain amounts as cum-service tax, which needed clarification. The Tribunal recognized the need for a detailed review of these claims and instructed the original adjudicating authority to reevaluate them.

4. Lastly, the appellants raised a claim of bona fide belief based on a relevant Tribunal decision. They argued that their belief was genuine and that the extended period for invoking penalties should not apply. The Tribunal considered this claim significant and emphasized the need for a thorough examination of the appellants' bona fide belief in the context of the relevant legal principles. Consequently, the matter was remanded for a fresh decision, allowing the appellants a fair opportunity to present their case and address all the issues raised.