2016 (6) TMI 776 - AT - Service Tax

Valuation - works contract service - taxability of services prior to 01.06.2007 - Held that - Without further going into the details of the submission made before us including facts of payment of service tax during the relevant period which according to the assessee is correct payment, we deem it fit to set aside the impugned order and remand the matter to the adjudicating authority for deciding appellants liability as also quantification of the tax required to be paid by them in the light of the Supreme Court s judgment in the case of L&T Ltd. (2015 (8) TMI 749 - SUPREME COURT) - Matter remanded back.

Summary

Issues:
1. Applicability of service tax on construction activities.
2. Interpretation of the latest decision of the Hon'ble Supreme Court in the case of L&T Ltd. Vs. CCE Kerala.
3. Requirement to pay service tax under the category of works contract.
4. Examination of each contract for service tax liability.
5. Remand of the matter to the adjudicating authority for further examination.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI involved a case where the appellant, engaged in construction activities and registered for service tax, faced proceedings for the confirmation of demand of service tax on the entire contracted value due to audit objections. The period in question was from 2005-06 to 2009-10. The appellant argued that post the Hon'ble Supreme Court's decision in the case of L&T Ltd. Vs. CCE Kerala, effective from 01.06.2007, they should be taxed under the category of works contract, not requiring payment of service tax before this date. The appellant highlighted the need to pay service tax under the composition scheme or after availing abatements, which the lower authorities had not considered.

The Revenue contended that the matter should be re-examined in light of the Supreme Court's decision in the L&T Ltd. case and by scrutinizing each contract with the service recipient. The Tribunal, without delving into the specifics of the payment of service tax during the relevant period, set aside the impugned order and remanded the matter to the adjudicating authority. The remand was for determining the appellant's liability and quantification of tax post the Supreme Court's judgment, emphasizing examination of the appellant's works contracts. The Tribunal clarified that all other legal issues remained open for the appellant to contest before the original Adjudicating authority during the remand proceedings. Ultimately, the appeal was allowed by way of remand, providing the appellant with an opportunity for further examination and clarification on the service tax liability in question.