2016 (11) TMI 490 - AT - Service Tax

Taxability - installation and commissioning charges - repair and maintenance of the equipments - training of staff of the customers - Revenue has sought to recover the service tax on such activities for the period prior to 01.07.2003 by taking the view that such services would stand covered by the taxable services of Consulting Engineer for the period upto 30.06.2003. With effect from 01.07.2003, service tax already stands discharged by the appellant. However, a portion of the service tax paid is disputed - Held that - It is settled law that when a new entry has been introduced in the service tax net from a particular date, the same activities cannot be levied to service tax for the prior period under different entry. In the present case, the three services have been included in the statute books with effect from 01.07.2003. Consequently, there can be no demand for service tax for the period upto 30.06.2003 under a different head as Consulting Engineer service. Payment of service tax for a portion of the taxable value received by the appellant - service tax paid by HO - Held that - Ld. Counsel for the appellant has contended that they are in a position to submit the proof of such payment once again before the original authority. Ld. Departmental Representative submits that even though copies of some challans are available on the record of the appeal, it is not possible to correlate such challans with the service tax demand. Under the circumstances, we are of the view that the case may be remanded back to the Commissioner with a direction to consider the documents submitted by the appellant and pass fresh orders after the verification of the same. However, we add that there shall be no demand of service tax prior to 01.07.2003 on the activities carried out by the appellant, which are covered by the services introduced with effect from 01.07.2003. Appeal disposed off - matter remanded.

Summary

Issues:
1. Whether service tax can be levied on activities included in the statute books with effect from 01.07.2003 for the period prior to that date.
2. Whether the appellant substantiated their claim of payment of service tax by their head office with sufficient documentary proof.

Analysis:

Issue 1:
The appeal was directed against an Order-in-Original passed by CST, Delhi, concerning the appellant's provision of pollution control equipment and related services. The Department alleged non-payment of service tax on services like installation, repair, maintenance, and training provided by the appellant. The dispute centered around whether these services, included in the statute from 01.07.2003, could be taxed for the period before that date. The appellant argued that the services were wrongly categorized under Consulting Engineer service, citing relevant circulars and case laws. The Tribunal held that activities introduced in the service tax net from a specific date cannot be taxed for the prior period under a different entry. It was established that service tax for the period before 01.07.2003 under Consulting Engineer service was not applicable, aligning with previous Tribunal decisions and High Court rulings.

Issue 2:
Regarding the second issue of substantiating the claim of service tax payment by the appellant's head office, the original adjudicating authority dropped the demand based on the appellant's submission. However, the Commissioner in the impugned order disallowed the claim, stating insufficient documentary proof. The appellant contended they could provide the necessary evidence again. The Departmental Representative argued that although some challans were available, they couldn't be correlated with the service tax demand. The Tribunal decided to remand the case back to the Commissioner for reevaluation, emphasizing the need for proper verification of documents. It was clarified that no service tax demand before 01.07.2003 on relevant activities should be made, as per the services introduced post that date.

In conclusion, the appeal was disposed of by remand, with directions to the Commissioner for a fresh assessment while maintaining the non-applicability of service tax for activities pre-01.07.2003 under a different service category.