2024 (2) TMI 729 - AT - Service Tax

Classification of service - service of radiography of plant and machinery to various clients - Revenue sought to classify the service under Technical Inspection And Certification Service whereas the appellant had classified the service under the Works Contract Service - invocation of Extended period of limitation on the ground that the appellant had not filed the Service Tax returns at the material time - demand pertains to the period October 2008 to March 2012 and April 2012 to March 2013 - HELD THAT - The works contract service applies only in cases where construction, erection, installation, commissioning, fitting out, repair maintenance, renovation alteration of any immovable or immovable property or any other similar activity is undertaken. Prima facie in some cases the service might fall under the service of technical testing analysis service however scope of work appears to be different in most of the contracts and the scope of work in each contract needs to be examined before coming the conclusion if the said service fall under the category of Technical Testing and Analysis Service or otherwise. The impugned order does not examine the description of scope of work in each work order. The description is different in each work order as can be seen from the analysis above. In view of above the matter needs to be reexamined by the lower authorities and each contract needs to be examined separately for the purpose of classification. Matter remanded back to the original adjudicating authority for fresh adjudication - appeal allowed by way of remand.

Summary

Issues involved:
The classification of services provided by the appellant under 'Technical Inspection And Certification Service' or 'Works Contract Service', invocation of extended period due to non-filing of Service Tax returns, and the applicability of the Voluntary Compliance Encouragement Scheme (VCES) prior to March 2012.

Classification of Services:
The appellant, engaged in radiography services for plant and machinery, classified the service under 'Works Contract Service' and paid service tax accordingly. The revenue sought to classify it under 'Technical Inspection And Certification Service'. The appellant argued that they do not provide certificates for the works carried out, and all jobs are executed on a work order basis. The demand pertained to the period from October 2008 to March 2013. The appellant claimed they availed the benefit of VCES for payment of service tax on the differential amount prior to December 2012 and started paying duty under protest thereafter.

Arguments and Analysis:
The appellant's counsel pointed out that the services provided did not include technical inspection and certification service as defined, emphasizing that the scope of works did not align with the criteria for certification or inspection. The authorized representative contended that the service did not fall under the definition of works contract service. The Tribunal noted that the description of services in the contracts with various clients indicated a scope of work beyond mere technical testing and analysis. The Tribunal found that each contract needed individual examination to determine the correct classification.

Decision and Remand:
The Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for fresh adjudication. The Tribunal highlighted the need for a detailed examination of each contract to determine the classification accurately. Additionally, the impact of the VCES claimed by the appellant needed to be evaluated by the lower authorities. The decision was pronounced in open court on 14th February 2024.