2018 (10) TMI 91 - AT - Service Tax

Penalties u/s 76, 77 & 78 of the Finance Act, 1994 - Erection, Commissioning and Installation - appellant case is that services provided by them would fall under the category of Works Contract and placed reliance in the case of ommissioner of Central Excise & Customs, Kerala vs. Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT - Revenue submits that inasmuch as the said decision of the Hon ble Supreme Court was not available at the time of passing of the impugned orders and the applicability of the same is to be examined in the terms of the contract entered into by the appellant with the service recipient, the matter is required to be re-examined. Held that - The applicability of the Hon ble Supreme Court s decision on Works Contract in the above referred case, is required to be examined by referring to the terms and conditions of the various contracts. Such verification can be done only at the level of the Original Adjudicating Authority - appeal allowed by way of remand.

Summary

Issues:
- Disposal of appeals arising from the same impugned order confirming a demand and penalties
- Imposition of common penalties under Sections 76, 77 & 78 of the Finance Act, 1994
- Applicability of the Hon'ble Supreme Court's decision on 'Works Contract' in the case
- Remand of the matter for fresh adjudication by the Commissioner

Analysis:
The judgment involves the disposal of two appeals filed by the assessee and the revenue, arising from the same impugned order confirming a demand of ?3,65,19,824 along with penalties. The revenue appealed on the ground of common penalties imposed under Sections 76, 77 & 78 of the Finance Act, 1994. The demand was confirmed against the appellant for the period from 01.10.2004 to 31.03.2009 under the category of Erection, Commissioning, and Installation. The appellant contended that the services provided by them fell under the category of 'Works Contract', taxable only from 01.06.2007. They also argued that services provided to Railways were exempted. The revenue argued that the applicability of the Hon'ble Supreme Court's decision on 'Works Contract' needed to be examined based on the contract terms. They also claimed that the appellant provided services to IIT, Kanpur, making them liable to pay service tax.

The Tribunal agreed with the revenue's contention and deemed it necessary to set aside the impugned order and remand the matter to the Commissioner for fresh adjudication in light of the Hon'ble Supreme Court's decision in the case referred to. The matter was to be re-examined at the level of the Original Adjudicating Authority, considering the terms and conditions of the contracts. The Adjudicating Authority was instructed to examine the appellant's plea regarding services rendered to Railways being exempted and whether the demand was barred by limitation. As the appellant's appeal was remanded, the revenue's appeal, which focused on the imposition of separate penalties under different sections, was also remanded for a fresh decision alongside the assessee's appeal. Ultimately, both appeals were allowed by way of remand, providing an opportunity for a fresh examination of the issues involved.