2009 (10) TMI 66 - AT - Service Tax

Cenvat Credit while availing exemption / abatement under notification no. 01/2006 dated 1.3.06 - Consulting Engineer Service under Section 65(31) read with Section 65(105(g) , Commercial & Industrial Construction Service under Section 65(25b) read with Section 65(105) (zzq) and Erection Commissioning or Installation Service under Section 65(39a) read with Section 65(105)(zzd) - Commissioner has held that the appellants are not eligible for the benefit of Notification No.1/06-ST dated 1.3.06 which was subject to the condition that no credit should be taken on the input service. Based on the above, the Commissioner has confirmed the demand of Rs.5,69,45,194/- along with interest and imposed penalties under various Sections held that since the order of commissioner is a non speaking order, not addressing various issues raised by the appellant matter remanded back

Summary

Issues:
1. Whether the appellant provided separate services of Consulting Engineer Service, Commercial & Industrial Construction Service, and Erection Commissioning or Installation Service.
2. Eligibility of the appellant for availing input credit under Notification No.1/06-ST.
3. Proper consideration of submissions and issues in the original order by the Commissioner.

Analysis:
Issue 1:
The appellant contended that they provided three distinct services as per the contract with the steel plants, namely Consulting Engineer Service, Commercial & Industrial Construction Service, and Erection Commissioning or Installation Service. The contract detailed the specific work areas and amounts payable to each party. However, the Commissioner held that the appellant did not render Consulting Engineer Service separately, leading to a demand of Rs.5,69,45,194 along with penalties. The Senior Advocate argued that the contract was divisible, with services billed and paid separately, and availing credit for Consulting Engineer Service did not affect the exemption for other services. The Tribunal found that the issue of separate Consulting Engineer Service was not adequately addressed and set aside the Commissioner's order for fresh consideration.

Issue 2:
Regarding eligibility for input credit under Notification No.1/06-ST, the appellant claimed credit for Consulting Engineer Service inputs. The Commissioner disallowed this credit, resulting in the demand. The Senior Advocate argued that even if Consulting Engineer Service was considered part of Commercial & Industrial Construction Service, the duty liability would be less than what was paid. The Tribunal did not express any views on the merits but ordered a fresh consideration by the Commissioner.

Issue 3:
The Tribunal observed that the Commissioner's order was cryptic and did not address all issues adequately. The submissions made by the appellants were not considered in the proper perspective. Consequently, the Tribunal set aside the order and remanded the matter for fresh consideration. The appellants were given 45 days to provide further submissions and evidence. The Tribunal clarified that all issues were kept open, and the stay petition was disposed of without expressing any views on the case's merits.