2012 (11) TMI 491 - AT - Service Tax

Waiver of Service Tax Liability, Interest and Penalty - Held that - Claim for treatment of the service under the Works Contract has never been made before lower authorities and it is too late for making such claim at this stage. As regards the claim that demand included the amount received prior to 10.09.2004,. Consultant could not contradict the submissions made by . A.R. that the deduction has already been allowed for the amount received prior to 10.09.2004. - stay granted partly.

Summary

Issues:
Service Tax liability for construction of petroleum outlets under Commercial or Industrial Construction category during September 2004 to October 2005. Claim for Works Contract treatment. Financial difficulty of the appellant.

Analysis:
The case involved the appellant engaged in constructing petroleum outlets for a specific corporation and facing Service Tax demand for the period between September 2004 to October 2005, along with interest and penalty under Sections 77 and 78 of the Finance Act, 1994. The appellant's representative argued that certain project amounts included services rendered before the service tax introduction date of 10.09.2004 and contended that the contract should be considered a Works Contract, absolving liability before 01.06.2007. Additionally, financial hardship was cited as a reason for non-payment.

The respondent's representative countered by stating that the lower authorities had already accounted for pre-10.09.2004 amounts and highlighted that the Works Contract claim was not raised earlier. The Tribunal noted that the Works Contract claim was belated and could not be entertained at that stage. Moreover, the appellant's financial condition was scrutinized through their Income Tax return, revealing substantial investments contradicting the claimed inability to pay the Service Tax demand.

Ultimately, the Tribunal found the appellant's arguments lacking merit both on the legal grounds and financial hardship. Consequently, the appellant was directed to deposit the confirmed Service Tax demand of Rs.1,31,317 within eight weeks, with a compliance report due on 23.11.2012. Conditional on this deposit, the application for waiver of the remaining balance pre-deposit was granted, and recovery stayed pending appeal resolution.