2018 (9) TMI 1499 - AT - Service Tax

Tribunal remands appeal for fresh review post-Supreme Court ruling on 'Works Contract' classification

The Tribunal remanded the appeal to the Commissioner for fresh adjudication in light of the Supreme Court's decision in the case of Commissioner of ... Classification of services - Execution of the work for Railways - Erection, Commissioning and Installation or Works Contract Services - Held that:- The applicability of the Hon’ble Supreme Court’s decision on ‘Works Contract’ in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT], is required to be examined by referring to the terms and conditions of the various contracts. Such verification can be done only at the level of the Original Adjudicating Authority - appeal allowed by way of remand. Issues: Appeal against confirmed demand under Erection, Commissioning, and Installation category, Applicability of 'Works Contract' and exemption for services provided to Railways, Remand for fresh adjudication.Analysis:1. The appellant appealed against the confirmed demand of Rs. 9,57,053/- along with penalties for the period from 01.10.2004 to 31.03.2009 under the category of Erection, Commissioning, and Installation. The appellant contended that the services provided by them should be categorized as 'Works Contract', which became taxable only from 01.06.2007. Additionally, they argued that the work executed for Railways falls under exempted services as per the definition itself, citing the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise & Customs, Kerala vs. Larsen & Toubro Ltd. reported in 2015-TIOL-187-SC-ST.2. The Revenue, represented by the Assistant Commissioner, argued that the Supreme Court's decision was not available at the time of passing the impugned orders. They emphasized that the applicability of the Supreme Court's decision on 'Works Contract' should be examined in the context of the terms of the contract between the appellant and the service recipient, necessitating a re-examination of the matter.3. The Tribunal agreed with the Revenue's contention and concluded that the applicability of the Supreme Court's decision on 'Works Contract' needed to be assessed by reviewing the terms and conditions of the contracts involved. This verification could only be carried out at the level of the Original Adjudicating Authority. Consequently, the Tribunal decided to set aside the impugned order and remand the matter to the Commissioner for fresh adjudication in light of the Supreme Court's declaration of law in the Larsen & Toubro Ltd. case. The Adjudicating Authority was instructed to re-examine the appellant's claim of services provided to Railways being exempted and also consider whether the demand was barred by limitation.4. The Tribunal, therefore, remanded the appeal, allowing it by way of remand, to enable a thorough review of the issues raised by the appellant regarding the nature of services provided, the applicability of tax post the Supreme Court's decision, and the exemption for services rendered to Railways. The decision highlighted the importance of re-evaluating the case in light of the latest legal pronouncements and contractual terms to ensure a fair and accurate adjudication of the matter.