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2024 (1) TMI 251 - AT - Service TaxClassification of service - Works Contract Service or commercial or Industrial Construction Service? - activity of construction of roads, buildings etc - facts not verified properly - violation of principles of natural justice - HELD THAT:- The aspect that whether service is classifiable under ‘work contract service’ has not been examined properly by the Adjudicating authority. Whether a service is classified as ‘work contract service’ depends on various facts such as whether the contract is executed with service and material both, whether the appellant has paid the State VAT, etc. Therefore, since the aspects of ‘work contract service’ has not been examined properly by the Adjudicating Authority, the entire matter needs to be reconsidered. As regard the appellant’s claim that the Adjudicating Authority has given hypothetical finding that the appellant could have entered in a single contract i.e. construction of building and road - in this regard prima facie view is that the finding of the adjudicating authority in this regard is not correct. For the purpose of levy of service tax individual contract has to be taken in account. Accordingly, the service tax demand can be determined. Therefore, merely on assumption that the appellant have entered into two separate contracts intentionally to evade the service tax is prima facie not tenable - however since the important aspect of works contract service needs to be reconsidered, the matter needs to be decided a fresh. Appeal allowed by way of remand.
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