2014 (10) TMI 453 - AT - Service Tax

Tribunal remands matter due to service tax demand exclusion, appellant's appeal granted

The Tribunal allowed the appeal by remanding the matter for fresh consideration, finding the Service Tax demand unsustainable in law due to the exclusion ... Management, Maintenance or Repair Service - GTA service - Whether service tax is leviable on the value of goods supplied while rendering management, maintenance or repair service - Held that:- Hon’ble High Court of Delhi the case of G.D. Builders & Others v. Union of India - [2013 (11) TMI 1004 - DELHI HIGH COURT], has clearly held that Section 67 of the Finance Act, 1994 enables the Government to levy Service Tax only on the consideration received for rendering of taxable service and it prohibits inclusion of value of goods supplied while rendering of a service. The same decision was followed by the Larger Bench of this Tribunal in the case of Hindustan Aeronautics Ltd. v. Commissioner of Service Tax, [2013 (11) TMI 1410 - CESTAT CHENNAI (LB)]. In view of the above decisions it appears that the impugned order is not sustainable in law and the matter has to be considered afresh by the adjudicating authority with respect to the appellant’s claim that the Service Tax confirmed in the impugned order pertains to the value of goods supplied and not on the consideration received for rendering of service on which they have already paid the Service Tax. The appellant is also at liberty to submit before the adjudicating authority evidences in support of their claim that the present demand pertains to value of goods supplied/sold to the recipient - Matter remanded back - Decided in favour of assessee. Issues:Service Tax demand under 'Management, Maintenance or Repair Service' category and GTA service, exclusion of value of goods supplied, sustainability of demands in law, consideration of Service Tax on goods supplied, appeal for grant of stay.Analysis:The judgment pertains to a Service Tax demand confirmed by the Commissioner for the period 16-6-2005 to 31-3-2010 on the appellant under the categories of 'Management, Maintenance or Repair Service' and GTA service, along with penalties imposed under Sections 77 and 78 of the Finance Act, 1994. The appellant challenged the demand, arguing that they were not liable to pay Service Tax on the value of goods supplied while undertaking maintenance/repair services, citing specific notifications excluding such values. The appellant also contended that they had discharged the correct Service Tax liability under the GTA service category.The appellant's counsel highlighted that the adjudicating authority failed to consider the exclusion of the value of goods supplied as provided in relevant notifications, rendering the demands unsustainable in law. The Revenue, represented by the Additional Commissioner, reiterated the findings of the adjudicating authority. The Tribunal, after reviewing the submissions, decided to dispose of the appeal without pre-deposit, considering that the appeal itself could be resolved at that stage.The main issue for consideration was whether Service Tax is leviable on the value of goods supplied during the rendering of management, maintenance, or repair services. Citing precedents, including a decision by the Hon'ble High Court of Delhi and a Larger Bench of the Tribunal, it was established that Service Tax can only be levied on the consideration received for the taxable service, excluding the value of goods supplied. Consequently, the Tribunal found the impugned order unsustainable in law and remanded the matter for fresh consideration by the adjudicating authority, allowing the appellant to present evidence supporting their claim that the demand pertained to the value of goods supplied, not the consideration received for the service.In conclusion, the appeal was allowed by way of remand, and the stay application was disposed of. The department's application for early hearing became infructuous and was also disposed of accordingly.