2012 (6) TMI 20 - AT - Service Tax

Stay application - waiver of pre-deposit - appellants provided erection commission and installation services in respect of various turnkey contracts - adjudicating authority had held that the appellants suppressed the facts and not informed the Revenue about services rendered by them Held that - appellant taken a plea that the contracts entered by them with various parties would squarely get covered under the definition of works contract under section 65(105)(zzzza) which came into effect from 1-6-2007 adjudicating authority has not given any reasoning to hold against the appellant on this point there is no dispute that the contracts are understood as works contract act by contracting parties application for waiver of pre-deposit of amounts is allowed

Summary

Issues:
1. Stay application for waiver of pre-deposit of Service Tax amount.
2. Confirmation of service tax imposed on the appellants.
3. Jurisdiction for issue of show cause notice.
4. Interpretation of works contract for service tax liability.
5. Pre-deposit considerations and interest of revenue protection.

Analysis:
1. The stay application was filed for the waiver of pre-deposit of a significant amount of Service Tax, including Education Cess, interest, and penalties under relevant sections of the Finance Act. The Tribunal considered the arguments presented by both sides and carefully examined the records.

2. The issue revolved around the confirmation of service tax imposed on the appellants for providing erection, commission, and installation services under various turnkey contracts in different states. The adjudicating authority found that the appellants had suppressed facts regarding the services rendered, leading to the imposition of service tax.

3. The jurisdiction issue was raised concerning the issuance of show cause notices by the Jaipur Commissionerate for service tax liabilities in states beyond its jurisdiction. The appellants argued that the contracts were work contracts falling under a specific category and should be taxed only from a certain date, relying on relevant case law and decisions.

4. The interpretation of works contract for service tax liability was a crucial aspect of the judgment. The appellants contended that their activities should be considered as works contracts and liable for tax only from a specified date, citing decisions from the Tribunal and the High Court to support their position.

5. In considering the pre-deposit and the interest of revenue protection, the Tribunal analyzed the arguments presented by both sides. It was observed that if the services provided by the appellants fell under the category of works contract services, the liability for service tax would only arise from a particular date, not the period in question. Consequently, the application for waiver of pre-deposit was allowed, and the recovery of the amount was stayed pending the appeal's disposal, emphasizing the importance of interpreting works contracts in determining service tax liability.