2013 (7) TMI 43 - AT - Service Tax

Stay application - proof of services provided to SEZ - adjudication authority observed that the bills cannot be accepted as the same can be manipulated. Hence, in absence of any proof for providing services to Hi-Tech Engineering SEZ, the benefit of exemption denied Held that - the facts have to be gone through and verified by the original adjudicating authority on being agitated by the appellants who have now been given the copies of the contracts available with the department. Appeal allowed.

Summary

Issues:
- Stay application and appeal against OIO NO.37/BVR/COMMISSIONER/2012
- Taxability of construction services provided to government agencies and other entities
- Demand for service tax of Rs.33,33,57,216/- reduced to Rs.11,26,76,524/-
- Verification of contracts and bills for services provided
- Adjudicating authority's confirmation of demand based on lack of proof for services provided
- Request for remand to original adjudicating authority for verification

Analysis:
The Appellants filed a stay application and appeal against OIO NO.37/BVR/COMMISSIONER/2012 regarding the taxability of construction services provided mainly to government agencies and entities like NHAI. A show cause notice demanded service tax of Rs.33,33,57,216/-, which was later reduced to Rs.11,26,76,524/- during adjudication. The issue revolved around the nature of services provided, with the Appellants arguing that certain demands related to repair and maintenance of roads should be dropped, similar to works for other entities. The Adjudicating authority confirmed the demand based on the lack of proof for services provided under specific contracts, leading to the disagreement with the Appellants' contentions.

During the hearing, the Appellants' counsel highlighted that all contract copies were seized by the department but recently returned to them. They argued that without access to these documents, they couldn't have produced them before the authority. The Appellants emphasized that reasons for dropping certain demands should apply to confirmed demands as well. Consequently, the case required remand to the original adjudicating authority for verification of contracts and bills, especially concerning the nature of services provided under specific contracts. The Appellants were directed to present their case before the authority to establish that the confirmed demands were related to repair and maintenance activities of roads. The decision allowed the appeal by way of remand for further proceedings and verification.