2010 (12) TMI 804 - AT - Service Tax

Waiver of pre-deposit - Appellants states that the work undertaken by the appellants was as per a contract with the Ahmedabad Municipal Corporation and the said work falls under the category specified under Section 65(97a) of the Finance Act, 1994 but is eligible for exemption under the exclusion clause as it is in relation to irrigation, watershed development and drilling, digging, repairing, renovating or restoring of water sources or water bodies, namely, Sabarmati river - The appellants have made out a prima facie case for complete waiver for pre-deposit - Decided in favour of assessee.

Summary

Issues: Exemption under Section 65(97a) of the Finance Act, 1994 for work related to irrigation, watershed development, and water sources restoration.

Analysis:
The judgment dealt with the issue of whether the work undertaken by the appellants, as per a contract with the Ahmedabad Municipal Corporation, falls under the category specified under Section 65(97a) of the Finance Act, 1994 and is eligible for exemption. The appellants argued that the work is in relation to irrigation, watershed development, and restoration of water sources, specifically the Sabarmati river. They presented a letter from the Municipal Commissioner listing the project objectives, including recharging groundwater levels, improving city transportation, addressing flood issues, providing informal markets, and recreational facilities. The Tribunal considered this clarification and the submissions from both sides. Ultimately, the Tribunal found that the appellants had established a prima facie case for complete waiver of the pre-deposit requirement during the appeal process. This decision was based on the nature of the project and its alignment with the specified categories under the Finance Act, leading to the waiver of the pre-deposit requirement.

In conclusion, the judgment focused on interpreting the provisions of Section 65(97a) of the Finance Act, 1994 in the context of the work carried out by the appellants for the Ahmedabad Municipal Corporation. The Tribunal carefully considered the project objectives outlined by the Municipal Commissioner and determined that the nature of the work aligned with the exemptions provided under the Act. As a result, the Tribunal granted a waiver of the pre-deposit requirement, acknowledging the prima facie case made by the appellants for exemption based on the project's objectives and their compliance with the relevant provisions of the Finance Act.