2023 (5) TMI 390 - AT - Service Tax

Taxability - Site formation and clearance, Excavation and Earth moving and demolition Service or not - short payment of service tax - irregular availment of CENVAT Credit - HELD THAT - The learned adjudicating authority has only referred to the definition of the impugned service as defined in the Finance Act, 1994 and also relied upon the Board s Circular to conclude that the activities undertaken by the appellant should fall under the taxable service of Site Formation and Excavation Service . The service tax liability is fastened under the statute, if the assessee is performing any service, which is in conformity with the definition of taxable services itemized in the Finance Act, 1994. It is not the case that the appellants themselves voluntarily obtained the service tax registration under the taxable category of Site Formation and Excavation Service . The show cause notice in these cases have proposed for recovery of the service tax under such taxable entry and the same was subsequently confirmed by the original authority in the impugned orders passed by him. In order to tax under the particular category of service, it is incumbent upon the adjudicating authority to discuss the scope/nature of work undertaken pursuant to the agreement vis- -vis the true scope and meaning of the definition of that particular taxable service, in order to categorized under the appropriate levy of tax under that particulars heads of service. Since, levy of tax is dependent upon the scope of work, proper analysis is required to be done for ascertaining the correct classification of service for the purpose of levy and collection of the service tax. Since, this particular aspect has to be dealt with at original stage, which as admittedly has not been done, the matter should be go back to the original authority for a proper fact finding as to whether the activities under taken by the appellants should be classifiable under the taxable entry of Site Formation Excavation and Clearance Service under Section 65 (97a) of the Finance Act, 1994. Irregular availment of Cenvat credit etc. - HELD THAT - Since, the issue of availment of Cenvat credit is dependent upon the nature of services provided by the appellants and their appropriate classification under the definition provided in this statute, we are also of the view that without determination of the correct applicability of the taxable entry, cenvat issue cannot be raised and the same in that case will be considered as premature. Short payment of service tax - HELD THAT - The same is also determinable upon proper classification of the service which is yet to be done by the original authority as per present order. Thus, under such circumstances that particular issue of short payment of tax cannot also be addressed at this juncture. Appeal allowed by way of remand.

Summary

Issues involved:
The judgment deals with the consideration of additional grounds in the appeals, the taxability of services under "Site Formation and Clearance, Excavation and Earth moving and demolition Service," and the classification of services for the purpose of levy and collection of service tax.

Consideration of Additional Grounds:
The appellants filed miscellaneous applications seeking the consideration of additional grounds in the appeals. The Revenue opposed these grounds, stating they had already been addressed by the adjudicating authority. However, the Tribunal allowed the miscellaneous applications as they raised a question of law, citing precedents from the Hon'ble Supreme Court. This decision was made in the interest of justice, allowing the additional grounds to be considered for a decision on merits.

Taxability of Services - Classification Issue:
The impugned orders confirmed the demand for service tax, interest, and penalties on the appellants, classifying the activities under the taxable entry of "Site Formation and Clearance" service. The appellants argued that the work undertaken did not align with the definition of "Site Formation and Excavation Service," under which the tax was imposed. The original authority had not sufficiently discussed the scope of work in relation to the taxable service. The Tribunal noted that the description of activities in the work order had not been properly analyzed to determine the correct classification for levy and collection of service tax.

Remand to Original Authority:
After examining the case records, the Tribunal found that a proper fact-finding was necessary to ascertain whether the appellants' activities should be classified under the taxable entry of "Site Formation Excavation Service." The matter was remanded to the original authority for a thorough analysis of the work undertaken by the appellants. The original authority was directed to address other issues raised in the impugned orders, including the eligibility of Cenvat credit and the issue of short payment of service tax. The appellants were to be granted a personal hearing before a fresh decision was made.

Conclusion:
In conclusion, the appeals were allowed by way of remand to the original authority for a comprehensive reevaluation of the classification of services and other related issues. The decision emphasized the importance of proper analysis and fact-finding in determining the taxability of services under the relevant statutory provisions.