2022 (3) TMI 1321 - AT - Service Tax

Levy of service tax - providing earthening of lightning arrestors at various building - erection, installation, commissioning, management, repairs and maintenance services or not - demand on the basis of form 26A obtained from Income Tax Department showing the deduction of income tax at source - HELD THAT - From the work orders enumerated in the impugned order in most of the cases that there is services has been provided along with material if that is the case, in that circumstances, service tax cannot be demanded under the category of erection, commissioning and installation services and management and repair services as same is merit classifiable under works contract services. In most of the cases the appellant has also supplied the goods which are in nature of sale of goods activity / trading activity. In that circumstances also, no service tax is payable by the appellant. Further, it is found that any services provided to deal with was excluded by virtue of entry no. 8 in the circular no. 103/05/2010-ST dated 24.5.2010. Therefore, the services provided to these agencies are not taxable. Further, Indian Institute of Technology, Kanpur is having sovereign power of clause 13/2016 in STR dated 1.3.2016. The same is exempted from payment of service tax being non commercial entity - any service in nature of erection, commissioning and installation, management and maintenance repair provided to local authority or government authority are exempt from payment of service tax. The matter is remanded back to the adjudicating authority to ascertain the service tax payable by the appellant on services which has been provided by the appellant without material under the respective categories of services - appeal allowed by way of remand.

Summary

Issues involved:
Demand of service tax for the period 2010-11 to 2012-13 based on income tax department information, non-cooperation of the appellant in providing financial documents, classification of services provided by the appellant under works contract services, applicability of service tax on services provided along with material, exemption under various notifications for services provided to non-commercial institutions and government authorities, confirmation of service tax demand against the appellant, lack of VAT payment evidence on supply of goods by the appellant.

Analysis:

1. Demand of Service Tax:
The case involved a demand for service tax from the appellant for the period 2010-11 to 2012-13 based on information obtained from the Income Tax Department regarding the appellant's income and TDS deductions. The appellant, registered as a service provider under works contract services, was alleged to have not paid service tax or filed returns during this period. The appellant's non-cooperation in providing financial documents was noted, leading to an enquiry by the department.

2. Classification of Services:
The appellant argued that most services provided were along with material and fell under works contract services, citing a Supreme Court decision. They contended that services provided to certain institutions were exempted under specific notifications. The Revenue claimed that services provided by the appellant were taxable, especially for the period post-1.7.2012 under the negative list based taxation regime. The issue of whether the services provided by the appellant were classifiable under works contract services or subject to service tax was central to the dispute.

3. Exemption and Applicability of Service Tax:
The appellant asserted that services provided to non-commercial institutions and government authorities were exempted under various notifications. They argued for exemption based on specific clauses in the notifications. The Tribunal found that services provided to certain entities were indeed exempt from service tax, and the appellant's trading of goods during the relevant period was also exempt from service tax.

4. Confirmation of Service Tax Demand:
The Revenue contended that the appellant failed to provide necessary details during the investigation, including evidence of VAT payment on goods supplied. However, the Tribunal found that the impugned demands were not justified based on the nature of services provided and the exemptions available under relevant notifications. The Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority for further examination and determination of the service tax payable by the appellant.

In conclusion, the Tribunal disposed of the appeal by way of remand, directing the adjudicating authority to ascertain the service tax liability of the appellant for services provided without material and consider any available exemptions before passing a new order in accordance with the law.