2014 (7) TMI 35 - AT - Service Tax

Demand of service tax - Maintenance and repair services - Service provided before being a taxable service - After service became taxable, work done as sub contractor - Held that - this point was not raised before the adjudicating authority. Secondly, it is not coming out clearly from the case records whether these services rendered before 16.06.2005 were in respect of immovable property or not. The veracity of the appellant s claim has to be gone through by the original adjudicating authority. Further, it is observed that the entire service tax demand is not for the period prior to 16.06.2005 and certain period of demand is after 16.6.2005 when immovable property was also covered under Maintenance and Repair Services . Charging of service tax from the sub-contractor - All the services provided by the appellant as sub-contractor may not be provided before 23.08.2007 as per the period of demand mentioned in the appeal memorandum. These factual verifications of entire service tax paid by the main contractor and whether the services were provide before or after 23.08.2007, have to be made and gone into details by the Adjudicating authority in the light of various case laws relied upon by the appellant, for which the matter is required to be remanded back to the adjudicating authority. - Decided conditionally in favour of assessee.

Summary

Issues:
1. Service tax liability on Maintenance and Repair Services provided by the appellant.
2. Service tax liability on sub-contracted services provided by the appellant.

Issue 1: Service tax liability on Maintenance and Repair Services:

The appellant contended that a significant portion of the confirmed demand pertained to services provided before 16.06.2005, arguing that Maintenance and Repairs of immovable property were not taxable under service tax provisions at that time. The appellant emphasized that the nature of services provided was clearly specified in the contracts. However, the Revenue argued that the appellant had agreed to provide services under Maintenance and Repair Services and had collected payments accordingly. The Tribunal noted that the point regarding services rendered before 16.06.2005 was not raised before the adjudicating authority. It was observed that the records did not definitively establish whether the services rendered before this date were related to immovable property. The Tribunal directed the appellant to deposit a specific amount and remanded the case to the Adjudicating authority for a detailed examination of the appellant's claims and the veracity of the service tax liability, especially for the period after 16.06.2005.

Issue 2: Service tax liability on sub-contracted services:

The appellant argued that there was no service tax liability on them for services provided before 23.08.2007, citing judicial pronouncements and CBEC clarifications. The Revenue contended that there was no evidence that the main contractor had fully discharged the service tax liability on the contracted services, part of which was sub-contracted to the appellant. The Tribunal noted the need for factual verifications regarding the service tax payments by the main contractor and the timeline of services provided by the appellant. The case was remanded to the Adjudicating authority for a detailed examination in light of the arguments presented by both sides. The appellant was directed to comply with a specific payment requirement before further proceedings.

In conclusion, the Tribunal allowed the appeal by remanding the case to the Adjudicating authority for a comprehensive review of both service tax liabilities. The appellant was instructed to make a specific payment and report compliance, after which the Adjudicating authority would reconsider the matter, providing an opportunity for the appellant to present their contentions.