2019 (6) TMI 381 - AT - Service Tax

Classification of services - laying of pipes for gas - classified as works contract services or not - HELD THAT - The issue that whether the services fall under Works Contract or otherwise was raised first time before this Tribunal and same was not raised before Original Adjudicating Authority to decide whether the services fall within Works Contract Services. Various factual aspects have to be verified that whether the service was provided along with the supply of material, whether the appellant have discharged the Sales Tax/WCT etc. Therefore, the matter needs to be reconsidered for the purpose of deciding the classification that whether the services fall under works contract. The issue of limitation is also kept open. Appeal allowed by way of remand.

Summary

Issues:
1. Classification of services as Works Contract Service.
2. Invocation of extended period for demand.

Classification of services as Works Contract Service:
The appellants were engaged in laying pipes for fluid and gas, paying Service Tax only for fluid pipes. The contention was that laying pipes for gas falls under Works Contract Service, not taxable before 01.06.2007. The issue was raised for the first time before the Tribunal, not the Original Adjudicating Authority. The Tribunal noted the need to verify factual aspects like service provision with material supply and Sales Tax/WCT discharge to determine if services fall under works contract. Citing relevant judgments, the Tribunal set aside the impugned order, allowing the appeal for remand to the adjudicating authority for reconsideration.

Invocation of extended period for demand:
The appellant argued that due to a bona fide belief that laying gas pipes did not constitute Erection, Commissioning, and Installation Services, the extended period was wrongly invoked as there were no malafide intentions. The Tribunal acknowledged this argument and kept the issue of limitation open for further consideration. Both parties were heard, and the Tribunal decided to remand the case to the adjudicating authority for a thorough review of the classification of services and the invocation of the extended period for demand. The impugned order was set aside, and the appeal was allowed for reconsideration.