2015 (9) TMI 49 - AT - Service Tax

Appellant directed to submit evidence for works contract valuation within 60 days; appeal remanded with specific directions.

The Tribunal directed the appellant to provide evidence of materials used in a works contract within 60 days to determine the value of taxable service. ... Waiver of pre deposit - Held that:- law relating to taxation of service by Finance Act, 1994 is not commodity taxation law, it would be proper to give an opportunity to the appellant to adduce necessary evidence supporting its claim on the value of the goods used in execution of the works contract. If the authority is satisfied as to the value of use of the goods in the work as pleaded by learned counsel to be substantiated by evidence, the gross value of the contract shall get reduced by the proved value of the goods. The residue shall only be liable to service tax at the appropriate rate prevailed during the relevant period. - Matter remanded back - Decided in favour of assessee. Issues: Classification of service for taxation, Evidence of materials used in works contract, Opportunity to present evidence, Application for re-adjudication, Stay applicationClassification of service for taxation:The appellant's counsel acknowledged that there is no dispute regarding the classification of the service provided. It was emphasized that if the gross value of the contract receipt is reduced by the value of the goods used in the contract, supported by verifiable evidence, the actual value of taxable service should be calculated reasonably. The counsel also clarified that the appellant is not claiming a composition scheme but is subject to the normal scheme of levy. Reference was made to a previous Tribunal decision upheld by the apex court to establish that the Finance Act, 1994 is not a commodity taxation law.Evidence of materials used in works contract:The revenue contended that the appellant failed to submit evidence of the materials used in the works contract to the adjudicating authority, leading to an appropriate order being passed based on the record. The Tribunal recognized the importance of substantiating the value of goods used in the execution of the works contract with evidence. It was deemed necessary to provide the appellant an opportunity to present necessary evidence supporting their claim on the value of goods used, which would impact the calculation of the taxable service value.Opportunity to present evidence:In light of the above, the Tribunal directed the appellant to make an application to the adjudicating authority within 60 days, accompanied by the evidence they intend to rely upon for determining the value of goods used in the works contract. The appellant was instructed to appear before the authority on the fixed date without seeking adjournment to explain their case. The authority was tasked with reevaluating the adjudication after affording the appellant a reasonable opportunity to be heard.Application for re-adjudication:It was clarified that the classification of service and any plea for a composition scheme should not be contested during the re-adjudication process. The appeal was remanded to the adjudicating authority with specific directions to reconsider the adjudication in light of the evidence to be presented by the appellant.Stay application:The stay application was disposed of in view of the order for re-adjudication, and the appeal was remanded to the adjudicating authority for further proceedings as directed.