2008 (2) TMI 57 - AT - Service Tax

Assessee initially discharged the service tax liability under the amnesty scheme under category of Commissioning and Installation & Consulting Engineers Services - On realizing that they were not liable to pay tax, applied for refund - impugned services come under the category of works contract is not in dispute - Department has not shown any evidence that the Respondents had received separate charges in respect of the different services rendered by them - refund allowed - appeal rejected

Summary

Issues:
1. Whether the Respondents were liable to pay service tax under the category of "Commissioning and Installation and Consulting Engineers Services."
2. Whether the Respondents were entitled to a refund after initially discharging the service tax liability under the amnesty scheme.
3. Whether the Commissioner of Central Excise (Appeals) correctly set aside the Order-in-Original rejecting the refund claim.
4. Whether the Department's appeal against the impugned order was justified.

Analysis:
1. The Revenue contended that the Respondents were providing taxable services under "Commissioning and Installation and Consulting Engineers Services." The original authority rejected the refund claim, stating that the Respondents were liable for service tax. However, the Commissioner (Appeals) disagreed, citing a Tribunal decision and ruling that the Respondents were not providing any taxable service but were involved in a works contract for turnkey projects. The Commissioner's decision was based on the absence of evidence showing separate charges for different services rendered.

2. The Respondents initially paid service tax under an amnesty scheme but later applied for a refund upon realizing they were not liable to pay. A show cause notice was issued for rejecting the refund claim, leading to the original authority's decision to reject the refund. The Commissioner (Appeals) overturned this decision, emphasizing that the Respondents were not providing taxable services but were engaged in works contracts.

3. The Revenue challenged the impugned order on the grounds that the Commissioner (Appeals) erred in concluding that the Respondents' turnkey project or works contract exempted them from service tax liability. The Department argued that the entire amount should be subject to service tax in the absence of a breakdown of contract elements. The Departmental Representative suggested directing the Respondents to provide detailed information for a proper decision.

4. The Tribunal analyzed the case, noting that the Department failed to provide evidence of separate charges for various services rendered by the Respondents. The Tribunal upheld the Commissioner's decision, stating that the Respondents' works contract nature was undisputed, and the Daelim Industrial Co. Ltd. case precedent applied. The Tribunal emphasized the need for the Revenue to investigate further and take appropriate action based on evidence, ultimately rejecting the Department's appeal.

This comprehensive analysis covers the issues raised in the legal judgment and the Tribunal's detailed reasoning for upholding the Commissioner (Appeals)'s decision in favor of the Respondents.