2011 (3) TMI 420 - AT - Service Tax

Waiver of pre-deposit - Application for stay - Commercial and Industrial Construction - Held that definition at clause (b) is for constructions and which is not for the purpose of commerce or industry - it is undisputed that the work executed by the appellant is in respect of the irrigation system for the Government of Andhra Pradesh and is not for any commerce or industry - Decided in favour of the assessee

Summary

Issues:
Waiver of pre-deposit of dues confirmed by Commissioner of Customs, Central Excise and Service Tax, Hyderabad for the period of dispute from 1.6.2007 to 30.9.2009.

Analysis:
The Appellate Tribunal, CESTAT, Bangalore, considered the application for waiver of pre-deposit of dues confirmed against M/s. Koya & Company Construction Pvt. Ltd. The dues included Service Tax amount, interest, and penalties under Sections 77 and 78 of the Finance Act, 1994. The appellants had executed drinking water and irrigation projects under EPC contracts with State Governments. The Commissioner classified the activity as works contract service under Section 65(105)(zzzza) of the Finance Act, 1994. The appellant sought waiver based on a previous Tribunal order in a similar case. The Jt. CDR reiterated the Commissioner's findings, stating the activity was appropriately classified as works contract service and not under 'Commercial and Industrial Construction' service.

The Tribunal had previously taken a prima facie view that the activity was not liable for service tax. The definition of 'works contract' services was analyzed, highlighting that construction not for commerce or industry was exempt from service tax. A circular clarified that works contract in respect of infrastructure projects executed through EPC mode, for welfare activities, were exempt from service tax. Based on these findings, the Tribunal ordered complete waiver of pre-deposit of the dues adjudged in the impugned order and stayed recovery pending the appeal's decision. The appeal was scheduled for hearing along with connected matters on a specified date.

This detailed analysis of the judgment showcases the Tribunal's consideration of the classification of the activity, the applicability of service tax, and the exemptions provided for certain types of projects. The decision to grant a waiver of pre-deposit was based on a thorough examination of legal provisions and precedents, ensuring a fair and just outcome for the appellant.