2013 (1) TMI 490 - AT - Service Tax

Waiver of pre-deposit - Stay of recovery - Gross value as cum-tax value - Construction of Complex Services - Abatement - Demand relating to the activities on semi-finished residential flats - Finishing works such as flooring, painting, commissioning of lifts and other petty works incidental to the completion of the residential flats - Assessee contended that cost of materials used in the above activities should be abated from the gross amount collected from the flat owners to arrive at the taxable value - Held that - The appellant has not produced even a sample copy of any of the agreements and, therefore, we are constrained to decipher their activities from the text of the impugned order. Prima facie, these activities were covered by the definition of Construction of Complex Services and therefore the appellant was liable to pay service tax, which they did not pay. Their plea for treating the gross value as cum-tax value was prima facie liable to be considered by the revisionary authority. The present application does not contain any plea of financial hardships. Direct the appellant to pre-deposit an amount of Rs. 5 lakhs and waive the balance amount.

Summary

Issues:
1. Appellant seeks waiver and stay of adjudged dues for service tax and education cess.
2. Classification of activities as 'Construction of Complex Services'.
3. Denial of abatement for cost of materials used in activities.
4. Treatment of taxable value as cum-tax value.
5. Plea for financial hardships not included in the application.

Analysis:
1. The appellant filed an application seeking waiver and stay regarding the demand of Rs.11,81,042/- for service tax and education cess for the period 2005-06 under 'Construction of Complex Services'. The Commissioner demanded this amount for finishing works on semi-finished residential flats sold by the appellant. The appellant argued that the cost of materials should be abated from the gross amount collected from flat owners for taxation purposes, a benefit denied by the revisionary authority. The appellant also requested the taxable value to be considered as cum-tax value, which was not granted by the Commissioner. The appellant's counsel presented a prima facie case on merits against the demand.

2. The Additional Commissioner opposed the appellant's plea for waiver and stay, reiterating the findings of the revisionary authority. The Tribunal found that the activities undertaken by the appellant, including flooring, painting, and commissioning of lifts on residential flats, fell under the definition of 'Construction of Complex Services', making the appellant liable for service tax. However, the plea for treating the gross value as cum-tax value was considered to be prima facie valid. The plea for abatement under certain notifications was also reviewed by the Commissioner.

3. The Tribunal noted that the appellant did not provide sample copies of the agreements with flat owners, making it challenging to understand their activities. Despite this, the Tribunal determined that the appellant was liable to pay service tax for the activities undertaken. The Tribunal directed the appellant to pre-deposit Rs. 5 lakhs within six weeks and report compliance, with a waiver of pre-deposit and stay of recovery on the remaining amount subject to due compliance. The plea for financial hardships was not included in the application, and the Tribunal considered all aspects before issuing its directive.