2013 (10) TMI 634 - AT - Service Tax

Penalty u/s 76 and 78 - Whether construction services provided by the petitioner were wholly in relation to completion and furnishing services enumerated in sub-clause (c) of Section 65(25b) of the Act or services falling under sub-clause (d) as well relating to alteration and renovation - Held that - it appropriate to grant waiver of pre-deposit and stay all further proceedings pursuant to the adjudication order pending disposal of the appeal, on condition that the petitioner remits Rs.15,50,000 plus the applicable interest on this amount to the credit of Revenue within four weeks from today. - stay granted partly.

Summary

Issues:
1. Service tax liability confirmation and penalties imposed.
2. Determination of construction services provided by the petitioner and eligibility for exemption/abatement under Notification No.15/2004-ST.

Service Tax Liability and Penalties:
The judgment addresses the confirmation of service tax liability amounting to approximately Rs.31 lakhs by the adjudicating authority through two show cause notices. Additionally, penalties equivalent to service tax under Section 78 and penalty under Section 76 were imposed, along with the order for recovery of interest. The key issue here pertains to the correctness and validity of the adjudicating authority's decision in confirming the service tax liability and imposing penalties. The judgment does not delve into the specifics of the penalties but focuses on the broader aspect of service tax liability confirmation.

Construction Services and Exemption/Abatement Eligibility:
The primary issue discussed in the judgment revolves around the nature of construction services provided by the petitioner/appellant. The question at hand is whether the services rendered were solely related to completion and furnishing services as per Section 65(25b)(c) of the Act, or if they also encompassed alteration and renovation services falling under sub-clause (d). Furthermore, the judgment examines whether the services provided were eligible for the benefit of exemption/abatement under Notification No.15/2004-ST. Ambiguity was noted in both the petitioner's response to the show cause notice and the adjudication order regarding this aspect, necessitating a detailed analysis for clarification.

The judgment, delivered by Mr. G. Raghuram, grants a waiver of pre-deposit and stays all further proceedings pending the appeal's disposal. The petitioner is required to remit Rs.15,50,000 plus applicable interest to the credit of Revenue within four weeks from the specified date, failing which the appeal would stand dismissed. The counsel for the appellant was present during the court proceedings and acknowledged the order, indicating the petitioner's understanding of the obligations outlined in the judgment. A compliance call was scheduled for a future date to monitor adherence to the remittance directive.