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2018 (4) TMI 1318 - HC - Service TaxRectification of order - works contract - Whether the order dated 12.08.2015 passed by the CESTAT deserved to be set aside since its finding that service tax is liable on works contract service prior to 01.06.2007 is vitiated? - Held that - there is a provision of Section 35EQ of the Central Excise Act,1944 for rectification of order and therefore, that the nomenclature of the application and order make no difference and prays that the aforesaid objection be ignored and matter be decided on merits. Works contract cannot be vivisected into various components. It cannot be taxed under different Acts - The work contract service involved in the present case, the erection, commission and installation would not be leviable to service tax as demand was made prior to 01.06.2007. Matter remitted back to the Customs, Excise and Service Tax, Appellate Tribunal, Principal Bench, West Block No.2, New Delhi to decide it refresh - appeal allowed by way of remand.
Issues:
1. Appeal filed under Section 35G of the Central Excise Act,1944 against the order dated 29.03.2017 in Misc. Appeal No.249/2009 and the order dated 12.08.2015 passed by the Customs, Excise and Service Tax, Appellate Tribunal, Principal Bench, West Block No.2, New Delhi. 2. Substantial questions of Law: A. Whether the order dated 12.08.2015 passed by the CESTAT deserved to be set aside due to the liability of service tax on works contract service prior to 01.06.2007. B. Whether the order dated 29.03.2017 passed by the CESTAT deserves to be set aside based on subsequent decisions by the Supreme Court. Analysis: 1. The appellant challenged the orders of CESTAT regarding the liability of service tax on works contract service before 01.06.2007. The appellant argued that a subsequent decision by the Supreme Court rendered the CESTAT's findings as a mistake of law. 2. The appellant contended that the review petition for rectification of the order was dismissed by the Tribunal, citing no provision under the Central Excise Act,1944 for review. The appellant relied on legal precedents to support the maintainability of rectification applications. 3. The appellant highlighted Sections 25 and 44 of the Act and legal judgments to argue that if a judgment is corrected by a Superior Court, an application for rectification is maintainable. The Tribunal's rejection of the review petition was contested by the appellant. 4. The appellant asserted that the appeal was filed within the 180-day period, challenging the revenue's objection based on limitation. The appellant urged the Court to set aside the impugned order and remit the matter back to the Tribunal for a fresh decision. 5. The respondent argued that the appeal was not filed within the 180-day period but acknowledged the timely filing of the review application. The respondent raised objections based on limitation, which the appellant countered by citing Section 35EQ of the Central Excise Act,1944. 6. The Court accepted the appellant's argument and treated the appeal as timely filed. On the merits, both parties agreed on the legal principles established by the Supreme Court in relevant cases. 7. The Court referenced legal precedents to conclude that works contract service cannot be vivisected into various components and taxed under different Acts. Therefore, the service tax demand made before 01.06.2007 on the works contract service was not leviable to service tax. 8. Consequently, the Court set aside the orders dated 12.08.2015 and 29.07.2017, directing the matter to be decided afresh by the Tribunal. Both substantial questions of law were decided in favor of the Assessee, allowing the appeal in part without costs.
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