2021 (10) TMI 587 - AT - Service Tax

Classification of services - Repair Maintenance or Commercial or Industrial Construction Service or Works Contract Service? - eligibility of abatement available for commercial or industrial construction service under N/N. 18/2005-ST - HELD THAT - Reliance placed in the earlier appeal of the appellant this tribunal in M/S H KANT CO. VERSUS C.C.E. S.T. VADODARA-I 2019 (2) TMI 1304 - CESTAT AHMEDABAD where Tribunal remanded the matter for verifying the fact of execution of work with material and whether the same falls under works contract. In the present case also the same fact is involved therefore, this matter also needs to be remanded for denovo adjudication to the Adjudicating Authority - Appeal is allowed by way of remand.

Summary

Issues: Determination of service category - Repair & Maintenance, Commercial or Industrial Construction Service, or Works Contract Service, and entitlement to abatement under the law.

Analysis:
1. The case pertains to the classification of services provided by the appellant as Repair & Maintenance, Commercial or Industrial Construction Service, or Works Contract Service, and the consequent eligibility for abatement as per the law.

2. The appellant's counsel argued that the service provided included new construction along with repair and maintenance, with the contract executed for service and material. The appellant had discharged sales tax on the material portion, contending that the service falls under Works Contract Service, which was not taxable during April 2006 to March 2007 based on a Supreme Court judgment. The appellant cited relevant case laws to support their argument.

3. The Revenue's representative reiterated the findings of the impugned order, emphasizing that since the appellant had paid sales tax on the material, the sale of goods and service should be considered separately, making the Supreme Court judgment inapplicable to the present case.

4. Upon review, the Tribunal found that the adjudicating authority had not verified whether the contract was executed with material and if the criteria for classifying the services as works contract were met. The Tribunal highlighted that if the service involved both material and execution criteria for works contract classification, it would merit classification under Works Contract Service, taxable from June 1, 2007, as per the Supreme Court's ruling. Consequently, the matter was deemed to require remand for verification by the adjudicating authority.

5. Given the similarity of facts with a previous order dated January 9, 2019, the Tribunal decided to remand the matter for de novo adjudication to the Adjudicating Authority. The fresh order should consider the observations made in the earlier order for a comprehensive decision.

6. Ultimately, the appeal was allowed by way of remand to the adjudicating authority for further proceedings and a fresh decision based on the clarified aspects of the case.