2013 (1) TMI 242 - AT - Service Tax

Residential and Industrial Construction Services - demand of service tax - Held that - It is undisputed fact that the appellant is providing commercial construction as well as residential construction. But if any service tax liability has to be fastened upon the appellant, it is for the adjudicating authority to come to a conclusion as to what will be the amount attributable to the commercial construction activity as well as the residential construction activities. In the absence of any such bifurcation on the service tax liability, the matter needs to be reconsidered by the adjudicating authority. Set aside the impugned order of demand and remand the matter back to the adjudicating authority to reconsider the issue afresh after following the principles of natural justice.

Summary

Issues:
Waiver of pre-deposit of service tax liability for Residential and Industrial Construction Services.

Analysis:
The appellant filed a stay petition seeking waiver of pre-deposit of service tax liability amounting to Rs.39,40,268/- with interest and penalties for the period 2005-06 to 2009-10 related to Residential and Industrial Construction Services. The Tribunal noted that the appeal could be disposed of promptly as it involved a narrow scope. Consequently, the Tribunal allowed the application for waiver of pre-deposit and proceeded to address the appeal itself. The Tribunal examined the case where the appellant provided construction services for commercial and industrial premises. It was observed that the adjudicating authority's findings on the service tax liability for residential premises were not in line with the applicable law. The key issue revolved around the service tax liability concerning commercial or industrial construction services provided by the appellant. The Tribunal emphasized the need for a proper determination of the service tax liability attributable to commercial and residential construction activities separately. Due to the lack of clear bifurcation by the adjudicating authority, the Tribunal deemed it necessary for the matter to be reconsidered. The Tribunal refrained from expressing any opinion on the case's merits and remanded the issue back to the adjudicating authority for a fresh consideration, emphasizing the importance of following the principles of natural justice in determining the service tax liability for commercial and residential construction activities. The adjudicating authority was directed to ensure a fair process before reaching any conclusions.

This judgment primarily addressed the appellant's request for the waiver of pre-deposit of a substantial service tax liability related to Residential and Industrial Construction Services. The Tribunal highlighted the importance of correctly determining the service tax liability for commercial and residential construction activities separately. The decision underscored the need for the adjudicating authority to reassess the matter while adhering to the principles of natural justice.