2008 (8) TMI 154 - AT - Service Tax

Rectification of Mistake Application Rejected for Service Tax Liability on Turnkey Projects

The Rectification of Mistake application regarding the liability for service tax on turnkey projects and works contract was rejected by the Tribunal. The ... Rectification of mistake - review of own order - erection, commissioning and installation services - works contract on turnkey basis - benefit of notification No. 12/2003 - input tax credit - no error apparent on the face of the recordRectification of mistake - erection, commissioning and installation services - works contract on turnkey basis - no error apparent on the face of the record - Application for rectification of mistake (review) against the Tribunal's final order which held the appellant liable for service tax as 'erection, commissioning and installation services' w.e.f. 16-6-2005. - HELD THAT: - The Tribunal had consciously considered the contract and recorded the submission of the appellant that their works were turnkey works contract, but nevertheless concluded on the materials that the services rendered fell within 'erection, commissioning and installation services' with effect from 16-6-2005. The Tribunal granted the benefit of notification No. 12/2003 and allowed input credit, and on that basis allowed the appeal. The present rectification application seeks to reopen and reverse that finding by characterising the services as works contract liable only from 1-6-2007. Reversing the earlier finding would amount to a review of the Tribunal's order. In the absence of any error apparent on the face of the record or mistake requiring rectification, and given that the Tribunal's conclusions were reached after examination of the contract, the remedy for the appellant is to pursue the normal appellate channels rather than seek rectification. Accordingly, no ground for rectification is made out.Rectification application dismissed; no error apparent on the face of the record and the Tribunal's finding that the services are 'erection, commissioning and installation services' w.e.f. 16-6-2005 upheld.Final Conclusion: The application for rectification of mistake is rejected: the Tribunal's deliberate finding that the services fell under 'erection, commissioning and installation services' from 16-6-2005 (with benefit of notification No. 12/2003 and input credit allowed) stands, and the appellant must seek relief, if any, through normal appellate remedies. Issues: Rectification of Mistake application regarding the liability for service tax on turnkey projects and works contract.Analysis:The appellant filed a Rectification of Mistake (ROM) application concerning the Final Order dated 12-2-2008, where they were treated as a 'works contractor' for undertaking 'Turnkey Projects.' The appellant argued that they should only be liable for service tax from 1-6-2007 onwards, as works contracts became taxable from that date. The Tribunal's finding in the order was that the appellants were liable for service tax from 16-6-2005 under 'erection, commissioning and installation services.' The appellants contended that their services should fall under works contract on a turnkey basis, making them liable for service tax only from 1-6-2007. The Tribunal, after careful consideration, upheld its decision that the services provided fell under 'erection, commissioning and installation service' from 16-6-2005, granting the benefit of a specific notification and allowing input credit. The Tribunal emphasized that reversing this finding would amount to reviewing its own order, suggesting the appellant should pursue normal appeal channels if they disagree. The ROM application was rejected as there was no error apparent on the face of the record, and the findings were based on a thorough examination of the contract.