2012 (2) TMI 107 - AT - Service Tax

Classification of taxable services - revenue classified under Consulting Engineer - Assessee classified as Erection, Commissioning and Installation - Held That - As per board circular from 01.07.03 to 09.09.04, services are classifiable under Erection, Commissioning and Installation Services, application for waiver of pre-deposit and stay was allowed.

Summary

Issues involved:
1. Liability to service tax for services rendered under Erection, Commissioning, and Installation Services category from 01.07.03 to 09.09.04.

Analysis:
The case involved a stay petition seeking the waiver of pre-deposit of a significant amount confirmed as service tax liability, interest, and penalty. The primary issue was the classification of services provided by the appellant under the category of Erection, Commissioning, and Installation Services for the period from 01.07.03 to 09.09.04. The appellant argued that the show cause notice did not adequately notify them of the classification under this category, as it initially pertained to consulting engineering services. The appellant relied on a Board's circular dated 08.08.07, emphasizing that services related to the direction of equipment would not fall under Erection, Commissioning, and Installation Services before 10.09.04. The appellant contended that their activity involved the Construction and Erection of Transmission Towers. The Revenue, represented by the SDR, supported the findings of the adjudicating authority.

Upon evaluating the submissions, the Tribunal found merit in the appellant's argument. It noted that the show cause notice originally focused on consulting engineering services, and the adjudicating authority had dropped the proceedings related to this category. However, for the period from 01.07.03 to 09.09.04, the appellant was not adequately informed about the classification under Erection, Commissioning, and Installation Services. The Tribunal referenced the Board's circular, which clarified that such services would be classified under this category only from 10.09.04 onwards. Consequently, the Tribunal concluded that the appellant had established a prima facie case for the waiver of the pre-deposit amounts. As a result, the Tribunal granted the application for waiver and stayed the recovery of the sums until the appeal's final disposal. Given the substantial amount involved, the Tribunal directed the appeal to be listed for disposal on a specific date.

In summary, the Tribunal's decision favored the appellant's argument regarding the classification of services under the Erection, Commissioning, and Installation Services category for the specified period. The reliance on the Board's circular and the lack of proper notice in the show cause notice supported the Tribunal's ruling in granting the waiver and stay of recovery pending appeal.