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2019 (5) TMI 465 - AT - Service TaxPrinciples of natural justice - Non-payment of service tax - erection, commissioning and installation services - works contract services - period from 2008-09 to 2012-13 - HELD THAT - The Appellant requested for an opportunity to demonstrate, which they failed to do earlier, before the adjudicating Commissioner that major portion of the work undertaken by them either on sub-contract basis or by themselves, relate to execution of projects connected with dams, hydro-electric power projects etc, hence not taxable. An opportunity may be accorded to the Appellant to place before the adjudicating Commissioner all the contracts/work orders and accordingly it is to be ascertained whether the claim of the Appellant is correct or otherwise - appeal allowed by way of remand.
Issues:
- Failure to discharge service tax for providing taxable services under erection, commissioning, and installation services and works contract services. - Rejection of application under VCES2013, leading to a Show Cause Notice for recovery of service tax. - Dispute regarding the taxability of projects related to dams, irrigation projects, hydro-electric projects, and other works contracts. - Dispute over the taxable value of projects mentioned in Annexure 'B' to the Show Cause Notice. - Request for remand to the Adjudicating Commissioner to demonstrate the nature of projects undertaken. Analysis: Issue 1: The appeal was filed against the Order-in-Original passed by the Commissioner of C.E. & S.Tax (Appeals) Nagpur, confirming the demand for service tax amounting to ?16,81,53,261/- not paid for the period from 2008-2009 to 2012-2013 along with interest and penalty. The Appellants were engaged in providing taxable services under erection, commissioning, and installation services and works contract services but failed to discharge service tax, leading to the present appeal. Issue 2: The Appellant's initial application under VCES2013 was rejected, prompting the issuance of a Show Cause Notice for the recovery of unpaid service tax. The Appellant contended that they discharged service tax except for services related to dams, irrigation projects, hydro-electric projects, thermal power projects, etc., during the relevant period. Issue 3: The Appellant argued that the projects listed in Annexure 'A' to the Show Cause Notice, executed on a sub-contract basis, were related to hydro-electric projects, dams, and construction of barrages, thus exempted from works contract service tax. They requested an opportunity to demonstrate before the Adjudicating Commissioner that these projects were not taxable under works contract service. Issue 4: Regarding the projects listed in Annexure 'B' to the Show Cause Notice, the Appellant disputed a few projects as not taxable, claiming that most projects were taxable while some were exempted. They agreed to pay the balance amount of service tax but requested a remand to the Adjudicating authority to determine the correct tax liability. Issue 5: The Appellant requested an opportunity to substantiate their claim before the Adjudicating Commissioner by providing each work order/contract related to construction of dams, irrigation projects, hydro-electric power projects, etc. The Tribunal allowed the appeal by remanding the case to the Adjudicating Commissioner for further examination and consideration of all contracts/work orders to ascertain the correctness of the Appellant's claim. In conclusion, the Tribunal allowed the appeal by remanding it to the Adjudicating Commissioner, granting the Appellant an opportunity to present all contracts/work orders to establish the nature of the projects undertaken and their taxability under works contract services.
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