Service tax on erection and installation work needs work order-wise scrutiny where fabrication and repairs may fall outside the levy.

Service tax liability under erection, commissioning or installation service had to be examined work order-wise with reference to the statutory entry as it stood during the relevant period, because the scope of the taxable category changed over time. The record also indicated that several orders involved fabrication of structures and repair or replacement work, and fabrication that amounts to manufacture may fall outside the service tax levy under the disputed entry. On that basis, the existing findings were insufficient to sustain the demand finally, and the matter was remanded for fresh adjudication after proper scrutiny of each work order and an effective opportunity of hearing.

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Issues: Whether the service tax demand under erection, commissioning or installation service could be finally sustained on the existing record in respect of the various work orders, particularly where the activities included fabrication of structures and repair work and where the scope of the taxable entry changed during the dispute period.

Analysis: The taxable entry for erection, commissioning or installation service underwent changes during the relevant period, and the activities had to be examined work order-wise with reference to the entry as it stood at the relevant time. The record showed that several work orders related to fabrication of structures and repair or replacement work, yet the classification exercise had not been completed with adequate reference to the changing statutory scope. The Tribunal also noted that fabrication of structures, where it amounts to manufacture under Section 2(f) of the Central Excise Act, 1944, may fall outside the service tax levy under the disputed category.

Conclusion: The demand could not be finally affirmed on the existing findings and the matter required fresh adjudication.

Final Conclusion: The impugned order was set aside and the matter was remanded to the original adjudicating authority for a de novo decision after proper examination of each work order and after granting the appellant an effective opportunity of hearing.

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