2009 (8) TMI 725 - AT - Service Tax

Waiver of pre-deposit - technical inspection and certification service - service rendered by the applicant to SEZ - exempted from the service tax - claiming exemption of Service tax on the ground that they were rendering services for infrastructure project Held that - issue is highly contentious - amount already deposited by the applicant - Waiver of pre-deposit allowed - disposal of the appeal

Summary

Issues:
1. Stay petition against waiver of pre-deposit of service tax amount.
2. Exemption of service tax on services provided to SEZ and South Central Railways.
3. Quantification of service tax liability.
4. Compliance with deposit requirements for waiver of pre-deposit.

Analysis:
The judgment by the Appellate Tribunal CESTAT, BANGALORE, involved a stay petition challenging the waiver of pre-deposit of a service tax amount of Rs. 48,01,418. The service tax amount in question was related to the services of 'technical inspection and certification' provided by the appellant. The Commissioner (Appeals) had granted relief based on non-receipt of payment from clients but had not quantified the actual amount payable towards service tax. The appellant argued that services to SEZ were exempt from service tax, and services to South Central Railways were non-taxable due to being related to infrastructure facilities. The appellant had already deposited Rs. 7,45,830 during the proceedings. The Tribunal confirmed a service tax liability of Rs. 2,67,590 on services to South Central Railways.

Regarding the services provided to SEZ, the Tribunal found them exempt from service tax for the relevant periods, which differed from the demand period. For services to South Central Railways, the issue of exemption based on infrastructure projects was deemed contentious and required further detailed examination during regular hearing. The Tribunal directed the appellant to deposit Rs. 2,67,000 within 8 weeks in addition to the amount already deposited, granting waiver of pre-deposit for the balance amount subject to compliance. Recovery of the balance amount was stayed pending appeal disposal, highlighting the importance of meeting deposit requirements for such waivers. The judgment emphasized the need for detailed scrutiny of exemption claims and quantification of tax liabilities in service tax matters, ensuring compliance with deposit obligations for obtaining relief.