The Supreme Court has condoned the delay of the Goods and Services Tax ( GST ) department and issued notice to Schindler India Pvt Ltd.
The bench of Justices B V Nagarathna and Augustine George Mash has tagged the matter along with C.A. Diary No.37729/2023 of the same Schindler India Pvt Ltd coming as Respondent. In both matters, the appeal was filed by the department.
The present case was filed against the order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) which ruled in favour of the respondent company. The tribunal quashed service tax demand on supply of equipment.
The Respondent-Department disputed Bajaj Auto’s payment of service tax on installation and commissioning charges after deducting amounts paid for equipment/parts already subject to VAT. The department issued a show cause notice for recovering service tax on the gross amount charged for the entire process, arguing that the bifurcation of equipment supply and installation/commissioning was not apparent.
Rohan Shah, Counsel for the Appellant, argued that the disputed demands originated from earlier periodic demands adjudicated under Section 73(1A) of the Finance Act, 1994. Since the previous demands were set aside, the three subsequent adjudication orders should also be set aside to maintain consistency and predictability in the Tribunal’s orders.
The Authorised Representative for the Respondent-Department supported the Commissioner’s order, emphasizing that Bajaj Auto had used different valuation methods at different stages without providing proof of VAT payment on the differential amount. This made it impossible to separate the value of materials from the value of taxable services.
A Two-Member Bench, comprising Dr. Suvendu Kumar Pati (Member, Judicial) and Anil G. Shakkarwar (Member, Technical), observed that since the earlier de novo adjudication order was set aside, the subsequent demands based on it must also be set aside. They concluded that the conformation of the demands in these three appeals, being based on previous orders that were overturned, should be nullified.
Thus, aggrieved by this order, the GST department has filed the appeal before the Supreme court of India. The apex court has condoned the delay and issued notice to the company.
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