2021 (10) TMI 187 - AT - Service Tax

Rectification of mistake - non-intimation to the Department in order to pay Service Tax on Works Contract Services under the composition scheme - benefit of paying reduced tax under the composition scheme was not extended to the appellant - HELD THAT - It is made clear that the Learned Counsel for the appellant has put forward argument only as to the rejection of the claim of the appellant for payment of Service Tax under the composition scheme. It is argued by him that the appellant ought to have been allowed to discharge Service Tax under the composition scheme for Works Contract and that the non-intimation to the Department prior to payment of Service Tax has to be considered as a procedural infraction. The non-intimation of availing the composition scheme is only a condonable lapse and that appellant has to be allowed to pay Service Tax under the composition scheme for Works Contract Services. The appellant is liable to pay Service Tax on such taxable value, however, at the reduced rate under the composition scheme - Appeal allowed in part.

Summary

Issues:
1. Rectification of mistake regarding remanded issue by the Tribunal.
2. Denial of benefit under the composition scheme due to non-intimation to the Department.
3. Interpretation of Works Contract service and eligibility for the composition scheme.

Analysis:
1. The appellant filed for rectification of mistake after the Tribunal remanded the issue regarding Works Contract service assessment. The High Court remanded the matter back to the Tribunal, emphasizing the need to rectify the mistake in the previous order.

2. The issue of denial of benefit under the composition scheme due to non-intimation to the Department was raised. The High Court held that failure to convey the option in writing should not be a valid ground to deny the benefit. The Tribunal had to rectify the mistake and allow the appellant to pay Service Tax under the composition scheme.

3. The eligibility for the composition scheme under Works Contract service was extensively discussed. The Department argued that the contract should involve transfer of property in goods and services, with the option exercised prior to payment of Service Tax. The Tribunal found that the non-intimation of availing the composition scheme was a condonable lapse and allowed the appellant to pay Service Tax under the composition scheme. The taxable value mentioned in the Show Cause Notice remained unchanged, but the appellant could pay at the reduced rate under the composition scheme.