2012 (6) TMI 118 - AT - Service Tax

Waiver of pre-deposit and stay of recovery - refund claim - refund claimed by the builder before the original authority is on the ground that they were not liable to pay Service Tax on the taxable value on which the sub-contractor (the present appellant) paid tax - main contention raised by the learned counsel is that the Department cannot recover Service Tax on a given taxable value from both the builder and the sub-contractor Held that - orders of the lower authorities set aside and allow this appeal by way of remand, application disposed of

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery in a Service Tax case.
2. Applicability of abatement under various Notifications.
3. Demand of Service Tax from both builder and sub-contractor.
4. Interpretation of 'gross amount charged' in the context of abatement.
5. Connection between refund claim of builder and recovery of Service Tax from sub-contractor.

Analysis:
1. The appellant sought waiver of pre-deposit and stay of recovery for Service Tax and penalty amounts. The Tribunal decided to dispose of the appeal without pre-deposit, indicating the need for final resolution at that stage.

2. The appellant, a sub-contractor for a builder, claimed 67% abatement under specific Notifications for Service Tax payment. The burden of tax paid was passed on to the builder. The department issued a show-cause notice denying abatement, leading to penalties and interest. The Commissioner (Appeals) upheld the order, prompting the present appeal.

3. The appellant argued against the demand for Service Tax from both the builder and sub-contractor on the same subject matter. They contended that abatement should be allowed on the gross taxable value, citing a previous decision for support.

4. The department opposed the abatement claim, stating that the gross amount charged should include the value of goods and materials supplied for the construction service. A relevant case law was cited to support the position that abatement was not admissible if the value of goods supplied was not included.

5. The Tribunal noted the connection between the refund claim of the builder and the recovery of Service Tax from the sub-contractor. It directed the original authority to re-examine the show-cause notice along with the refund claim, emphasizing a common decision and providing both parties with a fair hearing opportunity. The appeal was allowed by remand for further adjudication.