2024 (6) TMI 503 - AT - Service Tax

Levy of service tax under erection, commissioning or installation services (ECIS) or under management of maintenance or repair services (MMR) by invoking the best judgment assessment - benefit of cum-tax extended - HELD THAT - Both learned counsel for the appellant and Shri Manoj Kumar, learned authorized representative appearing for the department have stated that the present matter may also be remanded to the adjudicating authority for passing a fresh order in the light of the observations made by the Tribunal in the order on 2017 (12) TMI 450 - CESTAT NEW DELHI in the matter of the appellant for the previous years. The impugned order is accordingly, set aside and the matter is remanded to the adjudicating authority for passing a fresh order in the light of the observations made. However, as it has been stated by learned counsel for the appellant that the adjudicating authority has not decided the matter after remand, it is directed that the adjudicating authority shall decide the matter within a period of three months from the date a copy of this order is produced before the adjudicating authority by either of the parties. Appeal allowed by way of remand.

Issues:
Challenge to order confirming demand of service tax with interest and penalty.
Interpretation of services rendered to government departments as composite works contract services.
Validity of show cause notice for demanding service tax under 'erection, commissioning or installation services' or 'management of maintenance or repair services'.
Previous remand by Tribunal regarding vague show cause notice and non-cooperation with revenue.
Failure of adjudicating authority to pass a fresh order after remand by Tribunal.

Analysis:
The case involved a challenge by M/s. Ajay Machine Tools against an order confirming the demand of service tax with interest and penalty. The appellant claimed to have rendered various services to government departments during the disputed period, including supply and installation of electric equipment, repair and renovation of civil structures, service related to construction of flyovers and roads, and running maintenance and operation of electric equipment in non-commercial buildings. The appellant argued that these services constituted composite works contract services as per the decision in Commissioner of Central Excise & Customs, Kerala vs. Larsen & Toubro Ltd. The department issued a show cause notice proposing to demand service tax under 'erection, commissioning or installation services' or 'management of maintenance or repair services', leading to the current appeal.

The Tribunal noted a previous show cause notice issued to the appellant for a similar period, which resulted in a remand by the Tribunal to the adjudicating authority. The Tribunal emphasized that the appellant had initially failed to provide details of contracts to the revenue, leading to the vague nature of the show cause notice. The Tribunal rejected the appellant's argument that the notice was vague, stating that the appellant's non-cooperation did not justify setting aside the proceedings. The Tribunal also addressed the tax liability under different categories of services, including abatement for supply of materials and the applicability of service tax to contracts related to immovable property. The Tribunal remanded the matter to the Original Authority for a fresh decision, considering the merits of the case and the need for a detailed examination of each contract.

Despite the previous remand, the adjudicating authority failed to pass a fresh order, prompting both parties to agree on remanding the matter again. The impugned order confirming the demand of service tax was set aside, and the matter was remanded to the adjudicating authority for a fresh decision within three months. The Tribunal directed the adjudicating authority to decide the matter promptly based on the observations made earlier by the Tribunal. The appeal was allowed in part, emphasizing the importance of a timely and thorough adjudication process.

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