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2019 (5) TMI 1234 - AT - Service TaxErection, commissioning and installation Service - non-payment of service tax - HELD THAT - The Dy. Commissioner of Service Tax Division, Udaipur have verified the records and after verification of balance sheet, bills and various assessment orders passed by Commercial Tax Department, Udaipur have stated that the appellant has paid sales tax/VAT on certain quantities cleared by them and these are sales - Along with that report the Dy. Commissioner has enclosed the documents, which have been examined and verified by the Dy. Commissioner, which shows that the report filed by Dy. Commissioner is on the basis of verification of documents and same has been produced before the adjudicating authority for consideration. In the impugned order, instead of examining the documents, the adjudicating authority has reported that he had perused the said report and found that factually nothing has been verified - the said finding is without application of mind and without examining the documents and reports produced before him. Matter remanded back to the adjudicating authority to consider the report of the Dy. Commissioner dated 30 January, 2012 and verify all the document relied upon by Dy. Commissioner while preparing the report and thereafter to pass an appropriate order in accordance with law - appeal allowed by way of remand.
Issues:
Appeal against demand of Service Tax under erection, commissioning, and installation services. Analysis: The appellant appealed against an order confirming a demand of Service Tax amounting to ?4,86,83,693 under the category of erection, commissioning, and installation services. The appellant was engaged in providing these services to Jaipur Vidyuth Vitaran Nigam Ltd. and other organizations. An investigation was initiated based on information that the appellant was not paying Service Tax. The appellant provided their account details during the investigation, and various statements were recorded. The investigation alleged that the appellant was engaged in these services and not paying the required tax. A show cause notice was issued, proposing demand, interest, and penalties. The matter was adjudicated, and the demand in the show cause notice was confirmed, leading to the appellant's appeal. The appellant argued that they provided services along with materials and were also involved in selling machinery. The Dy. Commissioner verified the appellant's sales activities and submitted a report confirming sales and VAT payments. However, the adjudicating authority did not consider this report and confirmed the demand under erection, commissioning, and installation services, stating that no materials were supplied by the appellant. The appellant contended that their services should be classified as 'works contracts service' and not under erection, commissioning, and installation. The appellant sought to set aside the impugned order based on these grounds. The authorized representative argued that the material used in the services was consumed, justifying the classification under erection, commissioning, and installation services rather than works contracts service. Upon hearing both parties and examining the submissions, the Tribunal noted discrepancies in the adjudicating authority's treatment of the Dy. Commissioner's report. The report verified the appellant's sales activities, but the adjudicating authority did not properly consider it, leading to a flawed decision. Consequently, the Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority. The adjudicating authority was directed to consider the Dy. Commissioner's report, verify all relevant documents, and pass an appropriate order after providing the appellant with a reasonable opportunity to present their case. The classification of service was left for the adjudicating authority to determine during the adjudication process.
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