2018 (11) TMI 980 - AT - Service Tax

Maintenance or Repair Services - Revenue s appeal is on the ground that the first appellate authority has not considered the issue in the right perspective as the appellant had maintenance and repair contract from their clients M/s RINL - principles of natural justice - Held that - Since both sides contend that the First Appellate Authority made error in calculations and we find incorrect recording that there were no maintenance contracts, we find that this is a fit case to be remanded back to the first appellate authority to reconsider the documents and pass a fresh order - appeal allowed by way of remand.

Summary

Issues involved:
Appeal against Order-in-Appeal 10/2010 (V-II) ST, dt. 19.05.2010 passed by Commissioner (Appeals), Visakhapatnam covering demands dropped and confirmed by the first appellate authority.

Analysis:
1. Issue 1 - Maintenance Contract Existence: The assessee had service tax registration for "Maintenance or Repair Services." The department issued a demand notice for &8377;26,14,277/- covering the period 2003-04 to 2007-08. The first appellate authority set aside the demand for the period prior to 16.06.2005, citing the absence of a maintenance contract. However, the Revenue contended that a maintenance and repair contract existed with M/s RINL, supported by a work order specifying Structural Repair Works. The Tribunal found errors in the first appellate authority's conclusion and remanded the matter for reevaluation.

2. Issue 2 - Incorrect Calculation Post 16.06.2005: For the period post 16.06.2005, the differential service tax was reduced without sufficient justification. The first appellate authority also exempted an amount of &8377;5,71,269/-, arguing that the principal contractor fulfilled the service tax obligation. The Revenue argued against this exemption, citing the absence of any statutory provision. Discrepancies in the tax amounts paid were noted, leading to a request for a remand to rectify the calculations.

3. Issue 3 - Appellant's Grounds for Appeal: The appellant contested the demand confirmed by the first appellate authority, highlighting inconsistencies in treating services provided to different clients. The Tribunal observed errors in confirming demands for services rendered to specific clients post 16.06.2005, where payments were received earlier. The appellant's arguments were considered, leading to a remand for further examination by the first appellate authority.

4. Final Decision: The Tribunal allowed the appeals by remanding the matter to the first appellate authority for a fresh evaluation. Both parties' contentions regarding errors in calculations and the existence of maintenance contracts were acknowledged, emphasizing the need for a thorough review of all documents before reaching a conclusion. The decision was pronounced on 12.11.2018, leaving all issues open for reconsideration.