2023 (4) TMI 607 - AT - Service Tax

Wrongful availment of benefit of notification dated March 01, 2006 - benefit available only, if CENVAT credit on input services and capital goods had not been taken by the assessee (as assessee has also availed credit in respect of commercial or industrial construction service) - demand under works contract service, valid or not - HELD THAT - On remand, the Commissioner has confirmed the demand under works category holding that it could be done even if the show cause notice did not propose that the activity carried out by the appellant would fall under works contract service. This view taken by the Commissioner is contrary to the decision rendered by the Tribunal in INDIA GUNITING CORPORATION VERSUS COMMISSIONER OF CENTRAL TAX 2021 (2) TMI 400 - CESTAT NEW DELHI as it was held that a demand proposed under a particular category cannot be confirmed under a different category. It would not be possible to sustain the order dated February 09, 2017 passed by the Commissioner confirming the demand under the works contract service for the period w.e.f. June 01, 2007 - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the confirmation of service tax demand, availability of exemption under a notification, classification of service under works contract, and the validity of confirming demand under a different category than proposed in the show cause notice.

Confirmation of Service Tax Demand:
The order passed by the Commissioner confirmed the demand of service tax for a specific period but dropped the demand proposed for the period prior to June 01, 2007. The appellant challenged this order, leading to a series of legal proceedings.

Availability of Exemption under Notification:
Two show cause notices were issued to the appellant alleging wrongful availing of an exemption under a notification due to simultaneous availment of CENVAT credit. The Tribunal allowed an appeal, remanding the matter for fresh consideration in light of a Supreme Court decision regarding the taxable nature of the service.

Classification of Service under Works Contract:
During the appeal before the Tribunal, it was contended that the service provided fell under the category of works contract service, which became taxable from June 01, 2007, based on a Supreme Court decision. The Tribunal remanded the matter for fresh consideration by the adjudicating authority.

Validity of Confirming Demand under Different Category:
After remand, the Commissioner confirmed the demand under the works contract category for a subsequent period, even though the show cause notice did not classify the activity as such. The appellant argued that confirming the demand under a different category than indicated in the notice was improper, citing relevant Tribunal decisions.

Separate Judgement by the Tribunal:
In line with previous Tribunal decisions, it was held that confirming a demand under a category different from that proposed in the show cause notice was not sustainable. The order confirming the demand under the works contract service from June 01, 2007, was set aside, and the appeal was allowed.