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2023 (4) TMI 768 - CESTAT NEW DELHIClassification of services - Management, Maintenance & Repair Service - Board‘s circular No. B1/16/2007-TRU dated 22.5.2007 - appellant‘s first contention is that the department could not have charged service tax without first identifying which services were rendered and if they were taxable during the relevant period - HELD THAT:- When the appellant was asked for details of his business activity, he said that he did not have any ledger or balance sheets and that his invoices were destroyed. He, however, provided Form 26AS issued by the Income tax department. Since most of his clients were large, organized firms, they would deduct tax at source and issue Forms 16A with the income tax which shows how much amount has been paid and how much was deducted as tax. The data from these Forms is consolidated by the income tax system in Form 26AS. The Superintendent, then wrote to the clients and all but one provided Forms 16A which showed how much they had paid to the appellant. In this situation, when the appellant had not done anything which he was required to under service tax law, collected service tax of Rs. 15 lakhs from its clients and had not deposited it in the Government exchequer, had not provided the details of the services provided by him, claimed that the invoices were destroyed and that he had no balance sheet or ledger, the Superintendent did what could best be done based on the available information- viz., the Form 26AS provided by the appellant and the Forms 16A provided by the clients of the appellant. The appellant cannot now cry foul and claim that the department failed to classify the service. The second contention of the appellant is that some of the services rendered were in the nature of Works Contract Service and its claim for classification under Works Contract Service was rejected - It is found that this plea was taken by the appellant in respect of some contracts before the adjudicating authority. However, the adjudicating authority did not agree with this contention holding that unless VAT was paid on the goods which were transferred, it will not amount to Works Contract Service. There is no actual sale of goods but there is deemed sale of the goods which have been used while rendering the service. The deemed sale of the goods is exigible to VAT but it is not necessary that VAT has to be charged or must be chargeable in every such transaction. No VAT may be payable on some goods under the state laws but that does not convert the Works Contract Service into a pure service contract. Conversely, if no service tax is payable on the service portion of some types of works contracts, they do not automatically become contracts for sale of goods. The nature of the contract has to be examined and if it involves supply or deemed supply of goods and rendering service, it will be a Works Contract Service regardless of whether or not VAT or Service tax is payable. The appellant‘s contention that some of the contracts were Works Contracts must be examined by the original authority. The third main contention of the appellant is that no reason has been given for confirming demand after 1.7.2012. We find that all services were taxable from 1.7.2012 except those that fall in the negative list. If the appellant can show that its service fall under the negative list, it will be eligible to the exemption and not otherwise. Matter remanded to the original authority to re-adjudicate the case as follows. a) Any amounts collected by the appellant as representing service tax must be deposited in the Government exchequer whether or not the services which were rendered were actually exigible to service tax. b) The appellant‘s services may be classified as far as possible based on the work orders, invoices or other information which the appellant may provide. To the extent they are not provided, the adjudicating authority should exercise his/her best judgment.
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