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2010 (12) TMI 159 - AT - Service TaxWaiver of pre-deposit - The appellant was a sub-contractor for M/s Bharat Heavy Electricals Ltd (BHEL) during the material period - BHEL did not pay service tax under the aforesaid head as according to them they were not liable to pay service tax as main contractor prior to 10.9.2004 - It is their case that they were not liable to pay service tax on the amount received by them from M/s BHEL for erection inasmuch as erection was not a part of the service prior to 10.9.2004 - Appeal allowed by way of remand
Issues Involved:
1. Appeal against the order of adjudication demanding service tax and imposing penalties. 2. Application for waiver of pre-deposit. 3. Dismissal of appeal for non-compliance with Section 35F of the Central Excise Act. 4. Liability of the sub-contractor to pay service tax for the period prior to 10.9.2004. 5. Interpretation of the definition of service under Section 65 (39a) of the Finance Act, 1994. Issue 1: Appeal against the order of adjudication and penalties: The original authority demanded service tax from the appellant for the period under the head Erection, Commissioning or Installation. Penalties were also imposed. The appellant appealed to the Commissioner (Appeals) and applied for waiver of pre-deposit. The appellate authority directed pre-deposit of the entire amount, which the appellant did not comply with, leading to the dismissal of the appeal. The present appeal challenges the Appellate Commissioner's order of dismissal. Issue 2: Application for waiver of pre-deposit: The appellant moved an application for modification of the stay order requiring pre-deposit, which was rejected by the appellate authority. The Tribunal, after examining the records, inclined to grant waiver of pre-deposit for the period prior to 10.9.2004. Issue 3: Dismissal of appeal for non-compliance: The appeal was dismissed for non-compliance with Section 35F of the Central Excise Act, prompting the appellant to file the present appeal against the dismissal order. Issue 4: Liability of the sub-contractor for service tax: The appellant, a sub-contractor for BHEL, was demanded service tax for the period prior to 10.9.2004. The appellant contended that they were not liable to pay service tax for the erection part of the work as it was not considered a part of the service before the specified date. The Tribunal found the question of liability debatable and granted waiver of pre-deposit for the relevant period. Issue 5: Interpretation of the definition of service: The Tribunal analyzed the definition of service under Section 65 (39a) of the Finance Act, 1994. It differentiated between erection and installation, noting that the legislative authority recognized erection as distinct from installation. The Tribunal concluded that the appellant was not liable to pay service tax on the erection part of the work for the period before 10.9.2004. The Tribunal allowed the appeal by remanding the matter to the appellate authority for disposal on merits without further pre-deposit, ensuring a reasonable opportunity for the appellant to be heard. This detailed analysis covers the various issues involved in the judgment, outlining the key arguments and decisions made by the Tribunal.
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