2013 (9) TMI 740 - HC - Service Tax

Appeal against stay order - commercial or industrial construction service or site formation - Held that - The Tribunal, however, despite holding that there is strong prima facie case in favour of the appellant after finding that some of the activities/ services provided by the appellant fall within site formation taxable services while others within commercial or industrial construction service has not classified or apportioned the extent of such services for the purposes of consideration of waiver of pre-deposit. We find that an amount of ₹ 1,22,18,670/- has already been appropriated towards the total service tax demand of ₹ 2,17,24,330/- and thus in the absence of any quantification of the services, which do not accommodate any abatement under notification dated 10.9.2004, the appellant is entitled to further relief. - appellant to deposit further ₹ 22 lacs - stay order modified partly.

Summary

Issues:
1. Classification of taxable services provided by the appellant.
2. Assessment of service tax demand and waiver of pre-deposit.
3. Consideration of abatement under relevant notifications.
4. Apportionment of services for waiver of pre-deposit.

Classification of Taxable Services:
The appellant, a service tax registrant providing commercial or industrial construction service, faced a dispute regarding the classification of services provided. The department contended that the services fell within site formation and clearance, excavation, and demolition, which did not allow abatement. The Tribunal acknowledged a prima facie case in favor of the appellant, recognizing that some activities fell under site formation services and others under commercial or industrial construction. However, the Tribunal did not specify the extent of services for the waiver of pre-deposit.

Assessment of Service Tax Demand and Waiver of Pre-deposit:
The CESTAT found that the adjudication order assessed a service tax demand of Rs.2,17,24,330, with Rs.1,22,89,670 remitted under commercial or industrial construction service. The appellant sought a waiver of pre-deposit, arguing that the services provided were a mix of site formation and commercial or industrial construction. The CESTAT granted a waiver of 50% of the balance amount, requiring the appellant to remit the remaining balance plus interest within a specified timeframe.

Consideration of Abatement:
The dispute revolved around the applicability of abatement under Notification No.15/2004-ST dated 10.09.2004. The revenue argued that the services did not qualify for abatement due to misclassification. The Tribunal acknowledged the complexity of the services provided by the appellant and the differing interpretations of the relevant sections of the Act.

Apportionment of Services for Waiver of Pre-deposit:
Given the lack of quantification of services not eligible for abatement, the appellant was entitled to further relief. The court directed the appellant to deposit a specific amount within a specified period, with the remaining balance being waived for the appeal hearing. The judgment concluded by disposing of the appeal in line with the directions provided.

This detailed analysis of the judgment highlights the key legal issues, the arguments presented by the parties, and the court's findings and directions regarding the classification of services, assessment of tax liability, consideration of abatement, and apportionment of services for the waiver of pre-deposit.