2023 (10) TMI 321 - AT - Service Tax

Classification of services - Manpower Supply Services or Maintenance and Repair Services? - abatement under Notification No.24/2012-ST dated 06.06.2012 - reverse charge mechanism - extended period of limitation - HELD THAT - From the documents submitted by the appellant, it is clear that the services rendered by them have been rightly classified under the category of Maintenance and Repair Services . It further says that the appellant company approached, to provide the said service as required expressing the desire to take job of coil winding and Core Coil Assembly of transformers at their factory. The other clauses in the agreement also speaks about management or supervision activities to be carried out by the appellant company. In order to execute any work or provide any services some sort of manpower is required, however by reason thereof the agreement cannot be construed as one of providing manpower - the authorities below have rightly classified the services rendered by the appellant as one of Maintenance and Repairs only rather than for Supply of Manpower . Whether the appellant is entitle to claim the benefit of abatement of duty under Notification No.24/ 2012? - HELD THAT - The services rendered by the appellant falls in the category of Maintenance and Repairs Services for which no abatement is available under any of the two Notifications. Consequently, the service tax is payable on the whole gross amount received or billed by the appellant for providing the services. The appellant has next contended that under the RCM, the service tax has been paid by the recipient of the service, however perusal of the bills raised, the TDS Certificate of the service recipient does not disclose that the service tax has been paid by the recipient of the service and therefore the submissions made by the appellant cannot be agreed upon. The demand raised under both the show cause notices is recoverable from the appellant along with interest as the entire amount of service tax was not paid by the due date under section 75 of the Finance Act, invoking the extended period of limitation under section 73 as the appellant neither assessed the correct amount of service tax nor revealed the actual amount in the ST 3 returns - Appeal dismissed.

Summary

Issues involved:
The appeal challenges the Order-in-Appeal passed by the Commissioner of Customs (Appeals) regarding service tax liabilities and penalties.

Classification of services:
The issue is whether the services provided are "Manpower Supply Services" or "Maintenance and Repair Services" for claiming abatement under Notification No.24/2012-ST. The appellant argues that they provide manpower services and have paid service tax under Reverse Charge Mechanism. However, the Revenue contends that the services fall under "Maintenance and Repairs" as per ST-3 returns and GAR challan, and no abatement is allowed for manpower supply. The documents submitted by the appellant support the classification as "Maintenance and Repairs Services," as per contracts and payment details.

Entitlement to abatement under Notification No.24/2012:
The question is whether the appellant can claim abatement under Notification No.24/2012 for "Works Contract" when providing "Maintenance and Repair Services." The notification specifically addresses works contracts, and the appellant's mention of the wrong notification number does not change the nature of services provided. As the services fall under "Maintenance and Repairs," no abatement is applicable, and service tax is payable on the total amount billed.

Payment under Reverse Charge Mechanism:
The appellant argues that service tax has been paid by the recipient under RCM, but the lack of evidence in bills and TDS certificates disproves this claim. Consequently, the demand raised under the show cause notices is deemed recoverable along with interest due to non-payment by the specified date.

Decision:
The Tribunal upholds the classification of services as "Maintenance and Repairs," denying abatement under Notification No.24/2012 meant for works contracts. The appellant's reliance on RCM payments is dismissed due to insufficient proof. Therefore, the demand for service tax, interest, and penalties is confirmed, and the appeal is dismissed.

[Order pronounced on 09. 10. 2023]