2011 (2) TMI 672 - AT - Service Tax

Stay - Composition scheme by works contractor - Notification No. 1/2006-ST dated 1st March 2006 - When the ld. AR says that Rs. 24.00 lakhs has already been deposited during pendency of the proceeding that is also negated by the ld. DR, submitting that demand proposed in Show Cause Notice was nearly Rs. 1.5 crores and when the adjudication resulted with the demand of Rs. 1,20,13,215/- towards service tax, the appellant is not entitled to any concession of the amount of Rs. 24.00 lakhs - Stay granted partly.

Summary

Issues:
1. Whether the option for availing the composition scheme by works contractor needs to be exercised in writing.
2. Whether the appellant is entitled to abatement in terms of Notification No. 1/2006-ST dated 1st March 2006.
3. Whether the appellant has the right to claim substantial benefits and avoid liability if made liable to service tax.
4. Whether the appellant has to furnish evidence to claim appropriate abatement as a works contractor.
5. Whether the appellant's pre-deposit of Rs. 24.00 lakhs during the proceedings should be considered.

Analysis:

1. The counsel for the appellant argues that the law does not mandate the option for availing the composition scheme to be in writing. The appellant contends that if made liable to service tax, they should be entitled to abatement as per Notification No. 1/2006-ST. The respondent opposes this, stating that the option must be provided in writing, and without evidence, abatement cannot be granted. The tribunal finds that the option must be exercised in writing, as per the law, and without documentary evidence, the appellant fails to succeed on this count.

2. Regarding the second argument, the tribunal notes that to claim appropriate abatement as a works contractor, scrutiny of evidence is necessary. The appellant's claim of having already deposited Rs. 24.00 lakhs during the proceedings is contested by the respondent, who highlights the substantial demand proposed in the Show Cause Notice. The tribunal directs the appellant to make a pre-deposit of Rs. 30.00 lakhs as an interim measure, with compliance required within a specified timeframe.

3. The tribunal rules that the appellant must make the pre-deposit to stay the realization of the balance demand during the appeal's pendency. The judgment emphasizes the importance of complying with the order to avoid further liabilities. The decision reflects a balanced approach to address the issues raised by both parties, ensuring fairness and procedural adherence in the legal proceedings.