2011 (1) TMI 799 - AT - Service Tax

Fixing of RMC -the order of adjudication exhibit that besides supplying Ready Mix Concrete (RMC) the appellant was engaged in the preparation of ready mix concrete and also providing services such as transporting pumping laying placing and fixing of RMC at the construction site. Prima facie the sum and substance of the order of adjudication throws light on the primary activity of supply of ready mix concrete without satisfying elements of Industrial and commercial construction services which can be thoroughly examined in the course of regular hearing for which we dispense with requirement of pre-deposit during pendancy of appeal

Summary

Issues:
1. Service tax demand on commercial or Industrial Construction Service.
2. Exclusion towards value of goods supplied under Notification No. 12/2003-S.T.
3. Applicability of 'execution of works contract service' category.
4. Benefit of Notification No. 12/2003-S.T. exclusion.
5. Invocation of extended period provisions.
6. Treatment of received amounts as inclusive of tax.
7. Justification for levy of penalty.

Analysis:

1. The appellant contested the service tax demand on the grounds that the activities involving pouring, pumping, and laying of concrete were part of a sale transaction and not subject to service tax. The appellant argued that the Commissioner wrongly demanded service tax on transactions for the supply of Ready Mix Concrete (RMC) where these activities were not involved. The appellant maintained that its activities were more aligned with the category of 'execution of works contract service' introduced from 1-6-2007, and thus, no service tax was payable for contracts entered into before this date.

2. The appellant further argued that the Commissioner erred in denying the exclusion of the value of goods sold under Notification No. 12/2003-S.T. The appellant contended that the Commissioner wrongly invoked the extended period provisions, as the appellant had started paying service tax voluntarily from 1-6-2007, showing no intention to evade tax. Additionally, the appellant highlighted that the received amounts should have been considered inclusive of tax, and therefore, there was no justification for the levy of any penalty.

3. The Revenue supported the order of adjudication, asserting that the appellant was indeed providing commercial and Industrial construction services. The Revenue relied on specific sections of the order to justify their stance. However, upon hearing both sides and examining the record, the Tribunal noted that the primary activity of the appellant seemed to be the supply of RMC, alongside other services like transporting, pumping, laying, placing, and fixing of RMC at construction sites. The Tribunal decided to dispense with the requirement of pre-deposit during the appeal's pendency, allowing for a thorough examination of the matter during the regular hearing.

In conclusion, the Tribunal's decision highlighted the need for a detailed examination of the appellant's activities to determine the applicability of service tax and the relevant exemptions and provisions. The Tribunal's decision to allow the appeal to proceed without pre-deposit indicates a willingness to delve deeper into the complexities of the case, especially considering the significant stakes involved.