2026-VIL-1442-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Works Contract Service - Classification and Reconciliation of Tax Payments – Commissioner (Appeals) remanded matter for de novo adjudication directing reconsideration of classification under Works Contract Service with effect from 01.06.2007 and verification of Appellant's claim regarding payment of Service Tax on GTA services. De novo authority confirmed demand with partly re-quantification - Appellant challenged that de novo authority failed to comply with remand directions and had not properly verified reconciliation statements and tax payments – Whether de novo adjudicating authority correctly complied with remand directions requiring proper verification of tax payments and reconciliation of records and whether demand under GTA Service was correctly determined – HELD - After introduction of Works Contract Service with effect from 01.06.2007, composite indivisible works contracts are liable to be assessed only under Works Contract Service. The de novo proceedings recognised change in classification but do not disclose any proper reconciliation of Appellant's tax payments or basis on which surviving demand was quantified - Mere recording that documents were verified without indicating payments accepted or rejected and reasons therefor does not satisfy remand directions or requirement of reasoned adjudication. The earlier remand order specifically required verification of Appellant's claim regarding payment of Service Tax under GTA Service which necessarily required reconciliation of departmental computation. De novo order merely records that documents were verified without indicating payments accepted, payments rejected or reasons therefor. Reliance on balance sheet and ST-3 returns without reconciliation with books of account, GAR-7 challans and other contemporaneous records is insufficient to sustain demand - The extended period is held to be unavailable as proceedings originated from scrutiny of statutory records and mere discrepancies noticed during audit are insufficient to invoke extended period – The impugned order is set aside and the appeal is allowed
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