2013 (12) TMI 965 - AT - Service Tax

Abatement of service tax - Notification No.1/2006-ST, dated 01.03.2006 - Completion and Finishing Service - Whether the applicant is eligible for abatement of 67% in providing finishing thermal and acoustic insulation in buildings, with the use of mineral woods/gypsum slab in the roof slab - Held that - assessees have made out a strong prima facie case for waiver as the contracts entered into with their customers involved use of materials in addition to service, as seen from the various work orders received from the customers and, therefore, even if the services rendered by the assessees were in the nature of finishing and completion services , prima facie, service tax cannot be levied on materials (goods) - Following decision of Lloyd Insulation (India) Ltd. Vs Commissioner of Service Tax Chennai 2010 (9) TMI 633 - CESTAT, CHENNAI - Stay granted.

Summary

Issues:
Whether the applicant is eligible for abatement of 67% in providing finishing thermal and acoustic insulation in buildings with the use of mineral woods/gypsum slab in the roof slab.

Analysis:
The judgment revolves around the eligibility of the applicant for abatement of 67% concerning the provision of finishing thermal and acoustic insulation in buildings. The applicant, registered under "Commercial or Industrial Construction Service," was accused of also offering "Completion and Finishing Service" for new buildings or civil structures. The Commissioner upheld a tax demand of Rs.44,34,115/-, citing Notification No.1/2006-ST, which excluded the applicant from the abatement. The applicant contended that they were not solely providing "Completion and Finishing Service" but also supplying materials like imported thermal and acoustic insulation, for which they paid VAT. They argued that their services fell under "Erection, Commissioning and Installation," encompassing insulation and other services. Reference was made to previous Tribunal decisions supporting their stance.

The authorized representative for the Revenue stressed that the notification excluded "Completion and Finishing Service" from the abatement, emphasizing a strict interpretation of the notification. The Tribunal analyzed whether the applicant qualified for the abatement in providing finishing thermal and acoustic insulation in buildings, utilizing mineral woods/gypsum slab in the roof slab. Citing a similar case involving Lloyd Insulation (India) Ltd., where the Tribunal granted unconditional stay due to the use of materials in addition to services, the Tribunal found a strong prima facie case for waiver. The Tribunal decided that the present case mirrored the Lloyd Insulation case and warranted the waiver of pre-deposit of the entire tax amount, interest, and penalty. Consequently, the recovery of the amounts was stayed pending the appeal, with instructions to link this appeal with the Lloyd Insulations case.

In conclusion, the judgment extensively analyzed the applicant's eligibility for abatement in providing finishing thermal and acoustic insulation in buildings. By drawing parallels to a previous case and considering the use of materials in addition to services, the Tribunal granted a waiver of pre-deposit and stayed the recovery of the tax, interest, and penalty until the appeal's resolution.