2015 (9) TMI 1408 - AT - Service Tax

Waiver of pre-deposit - service of repair and maintenance - whether services to be taxable under MMR or CICS - appellant providing services to the non-commercial Govt. buildings - Adjudicating authority resorted to best judgement assessment under Section 72 ibid on the ground that appellant did not submitted ST-3 returns - Held that there is force in the contention of the appellant that it was entitled to the benefit of Notification No.12/2003-ST. Therefore, appellant is required to pay pre-deposit of 50% of the adjudicated service tax liability along with proportionate interest as per Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. - stay granted partly

Summary

Issues:
1. Confirmation of service tax demand under "Management, Maintenance or Repair Service" (MMR).
2. Best judgement assessment under Section 72 of the Finance Act, 1994.
3. Applicability of Notification No.12/2003-ST.
4. Pre-deposit requirement for appeal.

Confirmation of service tax demand under "Management, Maintenance or Repair Service" (MMR):
The appellant, an electrical contractor, challenged the service tax demand of Rs. 50,31,853 for the period 01.04.2010 to 31.03.2011, contending that there was confusion regarding the taxability of repair and maintenance services for non-commercial Govt. buildings. The appellant argued that it had a bona fide belief that service tax was not leviable and that the service was classifiable under Commerce or Industrial Construction Service (CICS). However, the adjudicating authority confirmed the demand under MMR, citing non-submission of ST-3 returns and resorting to best judgement assessment under Section 72 of the Finance Act, 1994.

Best judgement assessment under Section 72 of the Finance Act, 1994:
The tribunal noted that the Commissioner did not provide a basis for arriving at a 25% mark-up for the best judgement assessment. The appellant claimed that the actual figures for the service rendered were lower than the preceding year and that certain components of the service were not taxable. However, the appellant failed to provide evidence such as contracts to support the contention of non-taxability. Despite this, the tribunal acknowledged that the appellant might be entitled to the benefit of Notification No.12/2003-ST.

Applicability of Notification No.12/2003-ST:
The tribunal recognized the appellant's argument regarding the entitlement to the benefit of Notification No.12/2003-ST, dated 20.06.2003, which had not been extended. This factor was considered in the overall assessment of the case.

Pre-deposit requirement for appeal:
In light of the circumstances, the tribunal ordered a pre-deposit of 50% of the adjudicated service tax liability along with proportionate interest to meet the requirement of Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The pre-deposit was mandated to be made within eight weeks, with compliance to be reported by a specified date. Failure to comply would result in the dismissal of the appeal for non-payment. Additionally, recovery of the remaining adjudicated liabilities was stayed during the pendency of the appeal, subject to the pre-deposit compliance.