2008 (10) TMI 117 - AT - Service Tax

Appellant, PSU assail tax demand on the entire value of the contracted amount - appellant submit that these construction of buildings, roads, fly-overs etc. are for Govt. Departments and that only about 1.8% of contracted amounts represents the amount for rendering taxable consulting engineering services matter remanded - appellants can produce evidence before Adj. Authority to prove that the value of consulting engineering services amounts to only about 1.8% of total value of the contracts

Summary

Issues: Appeal for condonation of delay, pre-deposit of demands, service tax on contracted amount, proportionality of demanded amount, remand for evidence production, quantification of service tax.

In this judgment by the Appellate Tribunal CESTAT, Kolkata, the appellant, a public sector unit, sought condonation of delay due to obtaining necessary COD clearance. The Tribunal, after considering the circumstances, recalled the earlier dismissal order and allowed the Miscellaneous Application, restoring the Stay Petitions and Appeals to their original numbers. Subsequently, with the consent of both sides, the Tribunal decided to hear and dispose of the Appeals without pre-deposit of the demands, given that the Appeals themselves could be addressed on that day. The appellant's representatives argued that the Adjudicating Commissioner had demanded Service Tax on the entire value of the contracted amount, emphasizing that only a small percentage (1.8%) of the total amount represented consulting engineering services. They requested a remand to the Adjudicating Authority to provide evidence supporting the proportionality of the demanded amount. The Tribunal, after hearing both sides, set aside the impugned Orders and remanded the matter to the Adjudicating Commissioner. The Commissioner was directed to allow the appellant to produce necessary evidence to bifurcate the amount attributable to consulting engineering service charges and quantify the Service Tax accordingly. The appellant was to be granted a reasonable opportunity for a hearing before new Orders were passed, with all Appeals allowed by way of remand. The judgment was pronounced and dictated in open Court, ensuring a fair and transparent process.