Case Note & Summary
The Commissioner of CGST & Central Excise, Thane, filed an appeal under Section 35G of the Central Excise Act, 1944 read with Finance Act, 1994 against the order dated 25th May, 2018 passed by the Customs Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai. The respondent, Ajit India Private Limited, is a manufacturer and service provider of business auxiliary service, erection commissioning and installation service, renting of immovable property service, and transport of goods by road service. Pursuant to the order in original, the respondent was held liable for service tax amounting to Rs. 2,74,35,654/- by invoking extended period of time in the category of erection commissioning and installation services instead of construction of complex service. Aggrieved, the respondent filed an appeal before the CESTAT which was allowed. The Revenue then preferred this appeal proposing substantial questions of law: (i) whether the CESTAT was justified in taking a contrary view to its earlier order dated 9th October, 2012 passed in the same matter, remanding back the matter for a limited purpose and without keeping the other issue open; (ii) whether the CESTAT was right in holding that the demand under the Show Cause Notice is not raised under the correct head and therefore cannot be sustained; (iii) whether the CESTAT was right in holding that the activity carried out by the assessee is classifiable under Works Contract Service; and (iv) whether the CESTAT was right in holding that extended period of limitation cannot be invoked. The High Court dismissed the appeal, holding that the CESTAT's earlier remand order had attained finality on the classification issue, and the Revenue could not reagitate it. The Court also upheld the CESTAT's finding that the activity was classifiable under Works Contract Service and that the extended period of limitation could not be invoked.
Headnote
A) Service Tax - Classification - Works Contract Service vs. Erection Commissioning and Installation Service - The issue was whether the activity of the respondent was classifiable under 'erection commissioning and installation service' or 'works contract service' - The CESTAT had earlier remanded the matter for a limited purpose, and the Revenue could not reagitate the classification issue - Held that the CESTAT's finding that the activity was classifiable under Works Contract Service was correct (Paras 1-10). B) Service Tax - Limitation - Extended Period - The Revenue invoked extended period of limitation for demand of service tax - The CESTAT held that extended period cannot be invoked as there was no suppression of facts - The High Court upheld this finding (Paras 1-10). C) Service Tax - Show Cause Notice - Wrong Head - The demand was raised under 'erection commissioning and installation service' instead of 'works contract service' - The CESTAT held that the demand under the wrong head cannot be sustained - The High Court agreed (Paras 1-10).
Issue of Consideration
Whether the CESTAT was justified in taking a contrary view to its earlier remand order; whether the demand under the wrong head can be sustained; whether the activity is classifiable under Works Contract Service; whether extended period of limitation can be invoked.
Final Decision
Appeal dismissed. No substantial question of law arises.
Law Points
- Service tax classification
- Works contract service
- Erection commissioning and installation service
- Extended period of limitation
- Res judicata
- Finality of remand order
