2023 (5) TMI 195 - AT - Service Tax

Classification of services - works contract service or erection, commissioning or installation services? - demand confirmed under a category not proposed in the show cause notice - HELD THAT - A Division Bench of the Tribunal in M/s Gurjar Construction as Commissioner of Central Excise, Jaipur II 2019 (5) TMI 717 - CESTAT NEW DELHI examined such a position and after placing reliance on the decisions of the Supreme Court in Hindustan Polymers Company Ltd. Vs Collector of Central Excise, Guntur 1996 (12) TMI 84 - SUPREME COURT and Reckitt Colman of India Ltd Vs Collector of Central Excise 1996 (10) TMI 100 - SUPREME COURT observed that a demand made under a particular category cannot be sustained under a different category. It is not possible to sustain the impugned order dated 08.06.2017 passed by the Commissioner - appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are whether the Commissioner could confirm the demand of service tax under a category not proposed in the show cause notices, and whether the order passed by the Commissioner was legal.

Issue 1: Confirmation of demand under a different category
The Tribunal remanded the matter to the Commissioner to determine if the work orders issued to the appellant related to works contract service or services related to transmission or distribution of electricity. The Commissioner found that all work orders related to works contract service. The appellant argued that the demand of service tax was confirmed under works contract service, while the show cause notices proposed demand under erection, commissioning, or installation services. The department contended that the Commissioner's order was legal and did not require interference.

Issue 2: Legal basis for confirmation of demand
The key question was whether the Commissioner could confirm the demand of service tax under works contract service when the show cause notices proposed demand under a different category. The Tribunal cited previous judgments, including one by a Division Bench in M/s Gurjar Construction, which emphasized that a demand made under a particular category cannot be sustained under a different category. The Tribunal also referred to the decision in Ashish Ramesh Dasarwar vs Commissioner of Central Excise & Service Tax, Nagpur, which highlighted that a demand raised under the wrong category cannot be sustained. Based on these precedents, the Tribunal concluded that the impugned order passed by the Commissioner was not sustainable and set it aside, allowing the appeal.

This summary provides a detailed overview of the issues involved in the judgment and the Tribunal's reasoning behind setting aside the Commissioner's order.