2013 (7) TMI 348 - AT - Service Tax

Business auxiliary services - The applicant claimed that the agreement for laying pipes will fall under the category of Commercial and Industrial Construction service Held that - After going through the agreement the court decided The agreement is specifically for manufacture of concrete coated pipes as well as for open cut river crossing which includes de-watering, dismantling the cofferdam, restoring the river bed etc. Waiver of pre- deposit The court held that the case is not for total waiver of pre-deposit of the amounts involved Thus directed to deposit an amount of 50%of the duty - On deposit of the said amount the pre-deposit of remaining dues is waived and recovery is stayed.

Summary

Issues: Application for waiver of pre-deposit of Service Tax; Classification of services under Site Formation and Clearance, Excavation, Earthmoving, Demolition, Business Auxiliary Service, Commercial and Industrial Construction service; Allegation of suppression of evasion of payment of duty; Interpretation of contract agreement with Chinese firm for concrete coated pipes and river crossing work.

Waiver of Pre-deposit of Service Tax: The applicant sought a waiver of pre-deposit of Service Tax amounting to Rs.21,53,565. The demand was confirmed based on the activities undertaken by the applicant, including de-watering, soil filing, river-bed restoration falling under Site Formation and Clearance, Excavation, Earthmoving, and Demolition services, as well as fabrication of concrete coated pipes and site formation categorized under Business Auxiliary Service. The applicant contended that their agreement for laying pipes should be classified as Commercial and Industrial Construction service, for which they were registered and paying appropriate Service Tax under Notification No.1/2006-ST. They argued that the demand was time-barred due to regular filing of returns and payment of Service Tax, refuting any allegation of evasion or suppression of duty.

Interpretation of Contract Agreement: The Revenue contended that the applicant's contract with a Chinese firm designated them as a sub-contractor for specific works like VEGNI KHADI Open Cut River Crossing and manufacturing concrete coated pipes. Upon scrutiny of the agreement, it was established that the contract was not solely for laying pipes but explicitly for the production of concrete coated pipes on behalf of the Chinese firm and for tasks related to open cut river crossing, encompassing activities such as de-watering, cofferdam dismantling, and riverbed restoration.

Judgment: After reviewing the agreement and arguments presented, the tribunal concluded that the applicant failed to justify a complete waiver of the pre-deposit amount. Consequently, the applicants were directed to deposit Rs.10 lakhs within six weeks and report compliance by a specified date. Upon this deposit, the pre-deposit requirement for the remaining dues was waived, and any recovery was stayed during the pendency of the appeal.