2013 (10) TMI 816 - AT - Service Tax

Demand - Sevice tax on construction of residential complexes - Held that - Prima facie, it appears that applicant has discharged full liability in respect of the Majestic Orchard Project. Therefore, we take a slightly lenient view in the matter of pre-deposit required in the case of Le Orchard and we order the applicant to make a pre-deposit of Rs.30,00,000 within 6 weeks and report compliance by 13.9.2013. Upon such deposit, pre-deposit of balance dues arising from the impugned order is waived. - stay granted partly.

Summary

Issues:
1. Whether the applicant failed to pay appropriate service tax for two construction projects.
2. Whether the payment made by the applicant for one project can be accepted for another project.
3. Whether the demand for service tax is barred by limitation.
4. Whether pre-deposit is required for admission of the appeal.

Analysis:
1. The applicant, engaged in construction, faced a show cause notice for not paying service tax for two projects. The Tribunal confirmed an amount against the applicant for short-paid service tax, interest, and penalties. The applicant had paid a significant amount for one project, which the Commissioner did not appropriate due to lack of clarity on the period it covered. However, the Tribunal accepted the payment for the purpose of a stay petition.

2. Regarding the second project, the applicant argued confusion on service tax levy and cited legal reasons for non-payment. The main argument was the demand being time-barred since the show cause notice was issued later. The Revenue contended that the payment allocation was disputable but agreed to process the stay application based on the applicant's statement. The Tribunal ordered a pre-deposit for the second project, considering the full payment for the first project.

3. The Revenue argued against waiving pre-deposit, citing legal decisions favoring them and lack of disclosure by the applicant. The Tribunal acknowledged the full payment for one project and took a lenient view, ordering a specific pre-deposit amount for the second project and granting a stay on collection of dues during the appeal period.

This judgment clarifies the issues of service tax liability, payment allocation, limitation period, and pre-deposit requirements, providing a balanced decision based on the facts and legal arguments presented by both parties.