2013 (10) TMI 913 - AT - Service Tax

Waiver of pre deposit - Commercial or industrial construction service - Held that - Prima facie, on perusal of contract in issue and the analysis by the adjudicating authority, some of the activities/services provided by the appellant fall within the site formation taxable service while others fall within commercial or industrial construction service - waiver pre-deposit and stay further proceedings pursuant to the adjudication order is granted on the condition that the appellant remits 50% of the balance due of the assessed tax liability plus the interest thereon - stay granted partly.

Summary

Issues:
1. Waiver of pre-deposit sought after an adjudication order assessing service tax demand, appropriation of remitted amount, recovery of balance tax liability, interest, and penalty.
2. Classification dispute regarding the nature of services provided by the appellant under commercial or industrial construction service or site formation services.

Analysis:
1. The judgment revolves around the waiver of pre-deposit sought by the appellant following an adjudication order that assessed a substantial service tax demand, appropriated a portion of the remitted amount, ordered recovery of the balance tax liability with interest, and imposed penalties under various sections of the Finance Act, 1994. The primary relief sought by the appellant is based on the essential classification dispute arising from the nature of services provided, specifically whether they fall under commercial or industrial construction service or site formation services.

2. The appellant, a service tax registrant providing commercial or industrial construction service, faced allegations from the revenue authority regarding a mis-calculation of the category of taxable service provided. The revenue contended that certain activities/services offered by the appellant should be classified under site formation and clearance, excavation, and earth moving services rather than commercial or industrial construction service. This classification discrepancy led to the denial of abatement benefits under a specific exemption notification, further complicating the issue.

3. Upon reviewing the contract in question and the analysis by the adjudicating authority, it was observed that some services provided by the appellant could be categorized as site formation services while others aligned with commercial or industrial construction service. However, the adjudicating authority deemed the entirety of services as site formation services, thus rejecting the appellant's claim for abatement benefits under the relevant notification.

4. In light of the circumstances and the prima facie case in favor of the appellant, the judgment granted a waiver of pre-deposit and stayed further proceedings following the adjudication order. The appellant was required to remit 50% of the balance due of the assessed tax liability within a specified timeframe, excluding the penalty component, failing which the waiver would be rescinded, and the appeal dismissed for non-compliance. This conditional relief aimed to address the ongoing dispute and ensure compliance with the financial obligations imposed by the adjudication order.