2019 (7) TMI 1780 - AT - Service Tax

Judgment sets aside tax order for services; errors found in liability and penalty assessment

The judgment set aside the order demanding tax for various services, including 'commercial and industrial construction service,' 'management, maintenance ... Levy of service tax - Cargo handling service - renting of immovable property service - site formation and clearance, excavation and earthmoving and demolition service - benefit of N/N. 12/2003-ST dated 20th June 2003 - HELD THAT:- The decision of the Hon’ble Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] has altered the contours of tax liability arising from the several activities that existed earlier independently and now enumerated in ‘works contract service’ in Finance Act, 1994. The adjudicating authority had arrived at the conclusions in the impugned order without the benefit of that wisdom. On the clear finding of the adjudicating authority of the error in computation for inclusion in the proposed demand pertaining to ‘transport of goods by road’ service, we find no contrary evidence to overrule the decision therein. The matter is, therefore, remanded to the original authority for compliance with the directions - appeal allowed by way of remand. Issues:Two appeals impugning order-in-original dated 19th May 2014 demanding tax for various services. Dispute over demand on services like 'commercial and industrial construction service,' 'site formation and clearance, excavation and earthmoving,' 'management maintenance repair service,' 'renting of immovable property service,' and 'transport goods by road' service.Analysis:The judgment involves two appeals challenging an order demanding tax for services provided during specific periods. The appellant contested the demand related to various services, including 'commercial and industrial construction service,' 'management, maintenance or repair service,' and 'transport of goods by road service.' The demand on 'site formation and clearance, excavation and earthmoving and demolition service' was partially confirmed. The appellant's appeal focused on this aspect, while the Revenue's appeal was centered on the dropping of demand for 'transport of goods by road' service.The adjudicating authority had previously issued notices and confirmed demands for certain services. The appellant had appealed against these orders, resulting in directions for the authority to reconsider the matter after reviewing additional evidence. The impugned order confirmed demands for 'cargo handling service' and 'renting of immovable property service,' while partially confirming the demand for 'site formation and clearance, excavation and earthmoving and demolition service.'The appellant argued that the demand for 'site formation and clearance, excavation and earthmoving and demolition service' should have been limited to the service component based on a Supreme Court decision. The appellant also claimed to have discharged the confirmed liability for 'renting of immovable property service' and sought a waiver of penalty, which was denied by the adjudicating authority.The Revenue contended that the benefit of a specific notification precluded further benefits as a provider of 'works contract service.' They argued that only a few of the impugned work orders were subject to tax, supported by relevant case law. The Revenue's appeal focused on the Tribunal's decisions and High Court judgments for guidance.The judgment highlighted the impact of a Supreme Court decision on tax liability related to various activities now categorized under 'works contract service.' It noted errors in the computation of the proposed demand for 'transport of goods by road' service and emphasized the need to evaluate the penalty proposed for 'renting of immovable property service.' The judgment ultimately set aside the impugned order to enable a fresh decision by the adjudicating authority, remanding the matter for compliance with the directions provided.