2009 (6) TMI 895 - AT - Service Tax

Summary

Issues:
- Stay application against waiver of pre-deposit for service tax, interest, and penalties.
- Eligibility for abatement under Notification No. 19/2003.
- Demand of duty on services rendered before 10-9-2004.
- Limitation on the issue.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore involved a stay application against the waiver of pre-deposit for service tax, interest, and penalties. The case revolved around the eligibility for abatement under Notification No. 19/2003, the demand of duty on services rendered before 10-9-2004, and the limitation on the issue. The appellant argued that the services of "Erection, Commissioning or Installation Services" were wrongly confirmed as taxable for the period from 1-7-2003 to 31-3-2006. The appellant contended that prior to 10-9-2004, erection charges were not taxable, and post that date, they had paid the service tax liability on relevant contracts. The appellant also challenged the disallowance of abatement and the demand for services rendered before 10-9-2004.

Regarding the eligibility for abatement under Notification No. 19/2003, the Tribunal found that the appellant was eligible for abatement as they had not availed any input stage credit on inputs or capital goods. It was noted that the appellant had only taken credit on input stage services, which was not barred by the said Notification. Therefore, the Tribunal held that the demands were not sustainable on this point. However, concerning the demand of duty on services rendered before 10-9-2004, the Tribunal determined that a detailed review was necessary based on the contracts and legal submissions. Similarly, on the issue of limitation, the Tribunal concluded that a detailed examination was required during the final hearing.

Consequently, the Tribunal ruled that the appellant had not established a prima facie case for waiver of dues related to services rendered before 10-9-2004, thus imposing a pre-deposit requirement of Rs. 3,00,000. The appellant was directed to comply with this pre-deposit within 8 weeks, with a compliance report due by 20th August 2009. Upon such compliance, the balance amount was waived, and recovery stayed pending the appeal's disposal.