2014 (8) TMI 888 - AT - Service Tax

Change in the classification - Execution of electrical, interior and minor civil works - Erection, Commissioning & Installation Service - Held that - Adjudicating authority changed the classification of the service without giving any opportunity to the appellant to defend the case. In view of that, we set aside the impugned order and remand the matter to the adjudicating authority to decide afresh after considering the submission of the appellant. It is made clear that the appellant have not disputed the demand of tax in respect of Sl. Nos. 2, 3 and 4 mentioned in the above Table. The adjudicating authority shall also examine the deposit made by the appellant in respect of Sl. Nos. 2, 3 and 4. Needless to say that the appellant shall be given a reasonable opportunity of hearing before passing the order - Decided in favour of assessee.

Issues involved:
1. Demand of service tax on different categories.
2. Change in classification of service without opportunity to defend.
3. Remand of the matter to the adjudicating authority for fresh decision.

Analysis:

Issue 1: Demand of service tax on different categories
The appellant was engaged in various works for different sectors and received a show-cause notice proposing a significant tax demand for the period between June 2005 to June 2009. The demand included amounts for alleged non-payment of service tax on electrical and plumbing services, service tax on works contract tax (WCT), and service tax on maintenance and repair services (MRS). The appellant did not contest the demand for WCT, MRS, and a part of the demand related to service tax, which had already been paid along with interest.

Issue 2: Change in classification of service without opportunity to defend
The main contention arose regarding the demand of tax amounting to Rs. 60,29,469/-, which was initially proposed under the category of Erection, Commissioning & Installation Service but was later classified by the adjudicating authority as Commercial or Industrial Construction Service. The appellant claimed they were unaware of this change in classification and were not given a chance to present their case in this regard. The Tribunal noted that the change in classification was made without affording the appellant an opportunity to defend against it, leading to the decision to set aside the impugned order and remand the matter to the adjudicating authority for fresh consideration.

Issue 3: Remand of the matter to the adjudicating authority for fresh decision
The Tribunal allowed the appeal by way of remand, emphasizing that the appellant had not disputed the demand for certain categories of service tax. The adjudicating authority was directed to re-examine the matter, taking into account the appellant's submissions and the deposits made by the appellant for the undisputed tax amounts. The appellant was to be granted a reasonable opportunity for a hearing before a fresh order was passed. Additionally, an early hearing application filed by the appellant was dismissed as infructuous.

In conclusion, the Tribunal's judgment focused on ensuring procedural fairness by remanding the matter for a fresh decision due to the change in classification without proper opportunity for defense, while also clarifying the appellant's position on the undisputed tax demands.

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