2013 (10) TMI 191 - AT - Service Tax

Benefit of Notification No. 1/2006-ST Waiver of Pre-deposit - The appellant was laying optical fibre cables for BSNL and other telecom service providers Held that - The appellant had claimed that this activity does not amount to rendering of any service but had also paid service tax claiming the benefit of Notification No. 1/2006-ST after availing the benefit of abatement of 67% - CBEC Circular dated 24/5/2010 clarified the issue which was in favour of the assessee - On considering the circular, this Tribunal in the case of Nicco Corporation Ltd. Vs. Commissioner of Service tax, Kolkata 2012 (7) TMI 347 - CESTAT, KOLKATA - contracts were for laying the cables and the Board vide Circular dated 24/5/10 clarified that laying of cables were not liable to service tax - The appellant had made out a strong prima facie case for waiver of the pre-deposit Stay Granted.

Summary

Issues:
Waiver of predeposit of service tax liability, interest, and penalty under Section 78 of the Finance Act 1994 for laying optical fibre cables.

Analysis:
The appellant filed a stay petition seeking waiver of predeposit of Rs.90,70,559/- confirmed as service tax liability, interest, and penalty under Section 78 of the Finance Act 1994. The appellant argued that laying optical fibre cables for BSNL and other telecom service providers does not constitute a taxable service, citing a Board circular and previous Tribunal decisions supporting their claim. The Departmental Representative (DR) reiterated the lower authorities' findings.

Upon reviewing the submissions, the Tribunal noted that the appellant indeed laid optical fibre cables for telecom service providers and had paid service tax under Notification No. 1/2006-ST after availing abatement of 67%. The Tribunal considered a CBEC Circular dated 24/5/2010, which clarified that laying of cables is not a taxable service. Referring to previous Tribunal decisions in similar cases, the Tribunal found in favor of the appellant's interpretation.

Consequently, the Tribunal concluded that the appellant had a strong prima facie case for waiver of the predeposit amount. The application for waiver was allowed, and recovery of the amount stayed pending the appeal's disposal. The order was dictated and pronounced in open court by the Tribunal.

This judgment highlights the importance of relevant circulars and previous Tribunal decisions in interpreting tax liability issues. It underscores the significance of establishing a strong prima facie case when seeking waiver of predeposit amounts in tax disputes.