2018 (10) TMI 165 - AT - Service Tax

Commercial & Industrial Construction Services - contracts related to supply and fixing of doors and supply and fixing of pre coated sheets - It was alleged by Revenue that the service receivers had paid the appellant towards Service Tax of ₹ 5,93,910/- more than the amount paid towards Service Tax by the appellant - Held that - The nature of the contract was such that there was transfer of title of the goods supplied and also there was element of service - thus the matter needs to be examined taking the various contracts into consideration - appeal allowed by way of remand.

Summary

Issues:
1. Classification of services under Works Contract Service.
2. Application of Point of Taxation Rules, 2011.
3. Examination of demand related to alleged short payment of Service Tax.
4. Transfer of title of goods in the contract.

Analysis:
1. The appeal concerned the classification of services provided by the appellant under Works Contract Service. The appellant contended that the contracts involved supply and fixing of doors and pre-coated sheets, with the title of the material transferring to the service recipients. The appellant argued that the service should be classified under Works Contract Service. The Tribunal found that the contracts indeed involved both the transfer of goods' title and the provision of services. The Tribunal referred to the law laid down by the Hon’ble Supreme Court in a specific case to guide the examination of the contracts in question.

2. The appellant raised the issue of the non-applicability of the Point of Taxation Rules, 2011 during the relevant period of 2004-05 to 2008-09. The appellant argued that the service tax should be calculated based on receipts rather than billed amounts. The Tribunal noted this argument and directed the Original Authority to re-examine the issue in light of the appellant's submissions and the relevant legal provisions.

3. A significant aspect of the case involved a demand related to an alleged short payment of Service Tax amounting to ?5,93,910. The Original Authority confirmed a demand of ?11,33,519, which included this amount. The Tribunal found it essential to scrutinize this demand thoroughly. They instructed the Original Authority to investigate whether the service tax paid was in accordance with the consideration received by the appellant. The Tribunal emphasized the need to verify if there was any underpayment or discrepancy in the amount paid.

4. Lastly, the Tribunal highlighted the importance of examining the transfer of title of goods in the contracts under consideration. They emphasized the need to assess whether there was a proper transfer of title of the goods supplied, along with the provision of services. The Tribunal decided to remand the matter back to the Original Authority for a detailed examination of all these issues in line with the legal principles established by the Hon’ble Supreme Court. The Tribunal kept all issues open for further consideration by the Original Authority.