2012 (5) TMI 470 - AT - Service Tax

Laying of cables under or alongside roads - Erection, Commissioning or Installation - appellant claims prima facie case on the strength of both Board s Circular No. 123/5/2010-TRU dated 24.5.2010 it was clarified inter alia that laying of cables under or alongside roads did not constitute any taxable service under Section 65(105) of the Finance Act, 1994 - Held that - in the case of Rajeev Electrical Works (2012 (5) TMI 470 - PUNJAB & HARYANA HIGH COURT - Service Tax) had held that laying of pipes in wall/roof/floor for crossing of wires, fixing junction box, MS box, wooden box, fixing cable trays to lay cables, digging earth to lay the cables and digging earth pits for earthing of equipments did not amount to installation of plant, commissioning of machinery/ equipments etc. appellant need not be asked to make any pre-deposit. order is set aside and the appeal is allowed by way of remand

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery in respect of Service Tax and penalty amounts.
2. Compliance with Section 35F of the Central Excise Act.
3. Classification of services provided to Bharat Sanchar Nigam Ltd. (BSNL) as 'Erection, Commissioning or Installation' under the Finance Act, 1994.
4. Prima facie case based on Board's Circular and High Court's judgment.

Analysis:
1. The appeal sought waiver of pre-deposit and stay of recovery in relation to Service Tax and penalty amounts. The Tribunal decided to dispose of the appeal itself at that stage after examining the records and hearing both sides, thereby dispensing with the pre-deposit requirement.

2. The appeal was filed against the Commissioner (Appeals) order, which dismissed the appeal due to non-compliance with Section 35F of the Central Excise Act. The original authority had demanded Service Tax of over Rs. 16 lakhs from the assessee for providing services to BSNL without paying Service Tax. The appellate authority directed the assessee to pre-deposit the entire amount of Service Tax, leading to the dismissal of the appeal upon non-compliance.

3. The appellant had provided services to BSNL, including trenching, laying cables, jointing, constructions, and recoveries, without paying Service Tax as they believed the activities were not taxable. The Revenue argued that these activities fell under 'Erection, Commissioning or Installation' as per the Finance Act, making them liable for Service Tax. The lower appellate authority found no prima facie case on merits, resulting in the direction for pre-deposit and eventual dismissal of the appeal.

4. The appellant claimed a prima facie case based on the Board's Circular and a High Court judgment. The Circular clarified that laying cables alongside roads was not a taxable service, while the High Court decision stated that certain activities did not amount to installation of plant or commissioning of machinery. The Tribunal found a prima facie case for the appellant, considering the cited Circular and decision, and set aside the impugned order, remanding the appeal for de novo adjudication.

5. The Tribunal allowed the appeal by remanding it to the original authority for a fresh adjudication, ensuring the consideration of the Board's Circular and High Court's decision. The stay application was also disposed of accordingly.