2012 (5) TMI 64 - AT - Service Tax

Application for stay - The appellants have submitted a few job orders and invoices relating to the work done to demonstrate the nature of work - Held that Commissioner (Appeals) has dismissed their appeal for non-compliance with the provisions of Section 35-F of Central Excise Act. The counsel submits that in the first place, the impugned services are not classifiable under Erection and Commissioning - the appellant should be given an opportunity of hearing. - Decided in favor of the assessee by way of remand to Adjudicating authority

Summary

Issues: Classification of services under commissioning and installation, compliance with Section 35-F of Central Excise Act, opportunity for hearing before adjudicating authority

In this case, the appellants were engaged in various miscellaneous jobs for M/s Nestle India Ltd, such as unloading equipment, dismantling and reinstalling small equipment, and performing repair work on pipes. The Revenue attempted to tax these activities under the category of commissioning and installation based on payment data collected from M/s Nestle India Ltd, leading to a show cause notice being issued to the appellants. However, the appellants claimed they did not receive the notice and did not participate in the adjudication proceedings. The Commissioner (Appeals) required a pre-deposit of Rs.2 lakhs, which the appellants found challenging to pay as they were a small service provider. Consequently, the appeal was dismissed for non-compliance with Section 35-F of the Central Excise Act. The appellants argued that the services in question were not classifiable under Erection and Commissioning and that they were eligible for exemption as a small unit but were not given the opportunity to present their case before the authorities.

Upon reviewing the submissions from both parties, the Judge determined that the appellants should be granted a hearing opportunity. The Judge set aside the previous order and remanded the matter to the adjudicating authority. The appellants' counsel agreed to respond to the show cause notice within one month of receiving the order. Subsequently, the adjudicating authority was instructed to provide a chance for a personal hearing and make a fresh decision on the matter. As a result, both the stay application and appeal were resolved by overturning the initial order and sending the case back for reevaluation. The order was dictated and pronounced in an open court setting.