2011 (1) TMI 236 - AT - Service Tax

Demand - erection commissioning or installation - that a sum of Rs. 2, 70, 125/- stands deposited during the course of investigation even though the same is not payable - Tribunal in the case of Rajeeve Electrical Works v. CCE Chandigarh reported in 2007 -TMI - 4225 - CESTAT NEW DELHI and the decision in the case of Power Best Electricals v. CCE (2007 -TMI - 3443 - CESTAT BANGALORE) - Held that prima facie we hold that the liability to tax shall arise only from 16-6-2005 consequent upon amendment enlarging the scope of the impugned services - Decided in the favour of the assessee

Summary

Issues:
1. Service tax liability for the period from July 2003 to March 2005.
2. Applicability of service tax on erection, commissioning, or installation services.
3. Interpretation of relevant legal provisions and case laws.
4. Pre-deposit of dues and stay on recovery pending appeal.

Analysis:

Issue 1: Service tax liability for the period from July 2003 to March 2005
The applicant had a contract with the State Electricity Authority for supplying goods and executing work related to power lines. The original authority confirmed a service tax demand for the mentioned period, totaling Rs. 10,61,583, under the head of installation and commissioning, along with penalties. The Commissioner (Appeals) upheld this order.

Issue 2: Applicability of service tax on erection, commissioning, or installation services
The learned Consultant argued that the scope of services regarding "erection, commissioning, or installation" was expanded only from 16-6-2005, and prior to that, the service tax could not be demanded. The Consultant cited relevant Tribunal decisions supporting this argument.

Issue 3: Interpretation of relevant legal provisions and case laws
The Tribunal considered the submissions from both sides and found that the liability to tax would arise only from 16-6-2005 due to an amendment enlarging the scope of the services in question. The Tribunal also noted that the decisions relied upon by the Consultant supported the applicant's case, leading to a waiver of the pre-deposit of dues as per the impugned order.

Issue 4: Pre-deposit of dues and stay on recovery pending appeal
Based on the above analysis, the Tribunal held that the applicant had established a case for the waiver of pre-deposit of the balance amount of dues as per the impugned order. Consequently, the Tribunal granted a stay on the recovery of the dues until the appeal was disposed of.

In conclusion, the Tribunal ruled in favor of the applicant, citing the amendment effective from 16-6-2005 as the point from which the service tax liability arose. The waiver of pre-deposit and the stay on recovery were granted pending the appeal's disposal, in line with the arguments presented and the relevant legal provisions and case laws cited.