Service tax adjustment or refund remains open until contract classification determines the applicable tax incidence and liability.

Adjustment or refund of service tax paid cannot be determined before the contract is classified as a works contract or a service contract. The applicable tax incidence and nature of tax liability depend on that classification. As the classification exercise remained pending after remand, any definitive denial of adjustment or refund was speculative and premature. The earlier finding was vacated, and the appropriate authority must consider the adjustment or refund question after completing contract classification.

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Issues: Whether the determination that service tax already paid could not be adjusted or refunded was premature before classification of the contract as a works contract or a service contract.

Analysis: The tax incidence and the nature of the tax payable depended on the Assessing Authority's determination of the character of the contract. Since that classification was still to be undertaken pursuant to the remand, a definitive ruling on adjustment or refund of service tax introduced an impermissibly speculative element. The parties agreed that this question should remain for consideration by the appropriate authority after completion of the classification exercise.

Conclusion: The prior finding denying adjustment or refund of service tax was premature and was vacated; the question remains open for determination by the appropriate authority after classification of the contract.

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