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2017 (3) TMI 1157 - AT - Service TaxDemand of service tax - The department was of the view that the respondent is liable to pay service tax on account of four contracts - Held that - it appears that the respondent was regularly filing ST-3 returns and wherever the tax was collected the same was deposited honestly - The classification of a taxable service is determined based on the nature of service provided and that too the predominant part of the service if it comprises of multiple activities that could individually be discerned of having a taxable nature - appeal dismissed - decided against Revenue.
Issues:
Department's appeal against non-payment of service tax by the respondent based on contracts with M/s Bharat Sanchar Nigam Ltd. and M/s SECL. Detailed Analysis: The department filed an appeal against the respondent for not charging service tax on four contracts, despite holding service tax registration. The Commissioner (Appeals) observed that the services provided did not fall under specific categories and emphasized the predominant nature of the work as laying cables. The appellant had obtained service tax registration for specific services and had voluntarily paid service tax, which was not accepted by the adjudicating authority due to lack of detailed documentation. The Commissioner (Appeals) found the department's allegations unsubstantiated and emphasized that the classification of a taxable service is based on the nature of service provided. The Tribunal noted that the respondent regularly filed ST-3 returns and deposited tax honestly where collected. The classification of a taxable service is determined by the nature of service provided, especially the predominant part of the service. After considering the facts and circumstances, the Tribunal found the impugned order reasonable and upheld the Commissioner (Appeals) decision, dismissing the department's appeal. In conclusion, the Tribunal dismissed the department's appeal, emphasizing the importance of the nature of services provided in determining service tax liability and the need for proper documentation to substantiate tax payments. The judgment highlights the significance of the predominant nature of services in tax classification and the requirement for detailed records to support tax compliance.
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