2013 (2) TMI 634 - AT - Service Tax

Job Work - Notification No. 8/2005-S.T., dated 1-3-2005 - It is pointed out that the benefit was denied on the ground that the ducts and other items fabricated by the appellant were not excisable goods covered by the first schedule to the Central Excise Tariff Act. - held that - demand of service tax and education cess is not under any determinate head of taxable service. No breakup of the gross value for different categories mentioned in the impugned order is forthcoming. Apparently, the appropriate taxable service was not identified either in the show-cause notice or in the impugned order. A demand of service tax without correct classification of the taxable service is alien to the scheme of service tax levy. This apart, the learned Commissioner appears to have denied the benefit of the aforesaid notification on a ground which is not sustainable in law, given the parameters of the said notification. Activities otherwise includible within the ambit of Business Auxiliary Service were excluded from the levy from 2004 onwards where such activities involved manufacture of excisable goods. For claiming the benefit of the notification, the assessee should be held to have provided the taxable service. - Stay granted.

Summary

Issues:
Waiver of pre-deposit and stay of recovery in relation to service tax demand, penalties imposed, and benefit of Notification No. 8/2005-S.T.

Analysis:
The judgment pertains to applications seeking waiver of pre-deposit and stay of recovery concerning a service tax demand exceeding Rs. 1.17 crores, including education cess, for the period from October 2003 to September 2008. The demand was confirmed under various heads without a specific breakdown of the gross taxable value. The appellant had already paid Rs. 37 lakhs during investigations, which was appropriated, and claimed to have made an additional payment of Rs. 15,96,635, though not reflected in the order. The main contention was the denial of benefit under Notification No. 8/2005-S.T., dated 1-3-2005, based on the fabrication of items for a client. The appellant argued that the fabricated items should be considered excisable goods, thus qualifying for the notification's benefit. The demand was also challenged on grounds of time limitation and incorrect classification of taxable services.

The Tribunal noted that the demand lacked specific classification under taxable services, and the gross value breakdown was missing. It emphasized the importance of correctly identifying the taxable service for service tax levy. The denial of notification benefit was deemed unsustainable as the activities fell within the scope of 'Business Auxiliary Service' exempted from levy if involving the manufacture of excisable goods. The notification aimed to exempt services involving the production or processing of goods for the client, provided certain conditions were met. The appellant's claim for notification benefit was found prima facie sustainable, considering the exemption criteria. Despite the appellant's claim of an additional deposit, only the initial Rs. 37 lakhs was considered as a pre-deposit, granting waiver and stay of recovery for penalties, balance service tax, education cess, and interest.

In conclusion, the Tribunal allowed the applications for waiver of pre-deposit and stay of recovery, emphasizing the importance of correctly classifying taxable services and upholding the benefit of Notification No. 8/2005-S.T. for the appellant's case.