2018 (8) TMI 815 - AT - Service Tax

Power of Remand of Commissioner (Appeals)- change in Classification of services - Scope of SCN - Manpower Supply Services or Works Contract Service? - N/N. 30/12 dated 20.06.2012 - Held that - In view of the judicial precedent set by the Hon ble Supreme Court in MIL India Ltd. vs. CCE 2007 (3) TMI 8 - SUPREME COURT OF INDIA that after the amendment made in 2001 into Section 35A w.e.f. 11.05.2001 the power of remand of the Commissioner (Appeals) being taken away, it was incumbent upon the Commissioner himself to continue to exercise the power of adjudicating authority in the matter of assessment of tax liability of the appellant - Further, Commissioner (Appeals) has also been empowered by Section 35(A)(3) to make such further inquiry as may be necessary, before passing the order. The order passed by the Commissioner (Appeals) remanding back the matter for fresh adjudication is set aside and the case is remanded back to the Commissioner (Appeals) to exercise the power of adjudicating authority in the matter of assessment of service tax liability of the appellant, who is duty bound to place all relevant documents before him upon notice. Appeal allowed by way of remand.

Summary

Issues:
Challenge to remand order by Commissioner (Appeals) modifying classification from "manpower supply" to "works contract" beyond scope of show cause and contrary to Supreme Court finding.

Detailed Analysis:

1. Factual Background and Initial Adjudication:
- Appellant's audit report revealed unpaid service tax for manpower service.
- Adjudicating authority accepted appellant's reply, confirmed service tax demand for "works contract" with abatement, interest, and penalty.
- Appellant challenged order before Commissioner (Appeals) citing inconsistency in grounds.

2. Arguments Before Tribunal:
- Appellant's counsel argued against remand power of Commissioner (Appeals) in service tax cases.
- Appellant claimed to be a recipient of contract labour service, not manpower supply.

3. Respondent's Submission and Legal Precedents:
- Respondent cited Gujarat High Court and Ahmedabad Tribunal judgments supporting Commissioner's remand power.
- Differentiated Supreme Court's MIL India case from Gujarat High Court decision.

4. Tribunal's Analysis and Legal Interpretation:
- Examined Notification 30/12 introducing partial reverse charge mechanism.
- Highlighted the purpose of the new legislation to bring unorganized sectors under tax purview.
- Noted the difficulty in identifying vendors under the new system, as discussed in literature and circulars.

5. Judicial Precedent and Commissioner's Obligations:
- Commissioner (Appeals) lacked relevant documents to assess service nature and tax liability.
- Ruled that Commissioner should have determined classification before imposing penalties.
- Mentioned the Supreme Court precedent on the power of remand by Commissioner (Appeals).

6. Final Order and Decision:
- Tribunal allowed the appeal, setting aside the remand order by Commissioner (Appeals).
- Remanded the case back to Commissioner (Appeals) to assess service tax liability with all relevant documents.

This detailed analysis covers the issues raised in the judgment, including the challenge to the remand order, legal arguments presented, interpretations of statutory provisions, and the final decision of the Tribunal.