2013 (12) TMI 970 - AT - Service Tax

Stay application - Demand of service tax - Exemption Notification No. 1/2006-ST - Whether providing of finishing services, in continuation or as part of the construction of complex service would amount to providing a distinct service falling within the re-strive clause of the exemption notification which provides that exemption would not apply where the taxable service provided is only completion and finishing services - Held that - Prima facie case in favour of assessee - Stay granted partly.

Summary

Issues:
1. Availability of abatement of tax under Notification No. 1/2006-ST for completion and finishing services in relation to Residential complex service.
2. Whether providing finishing services as part of construction amounts to a distinct service under the exemption notification.
3. Granting waiver of pre-deposit and stay of proceedings.

Analysis:
1. The judgment revolves around the availability of abatement of tax under Notification No. 1/2006-ST for completion and finishing services in relation to Residential complex service. The appellate Commissioner confirmed the adjudication order, levying service tax and penalties, stating that the abatement benefits were not applicable to the petitioner. The petitioner had provided construction and finishing services for residential complexes, including POP, floor tiling, and marble flooring. The issue of whether these finishing services constitute a distinct service under the exemption notification was raised for consideration.

2. The appellate Tribunal found a prima facie case in favor of the petitioner/assessee and acknowledged an arguable case for the Revenue as well. The Tribunal granted a waiver of pre-deposit and stay of further proceedings, subject to the petitioner remitting 50% of the basic tax liability assessed within a specified timeframe. Failure to comply would result in the dissolution of the waiver and stay, leading to the dismissal of the appeal. The order was duly noted by the appellant's counsel, ensuring awareness of the obligations under the order.

3. The judgment delves into the interpretation of the exemption notification concerning the provision of completion and finishing services in relation to residential complexes. It highlights the necessity to analyze whether providing finishing services as part of the construction process amounts to a distinct service falling within the exemption clause. The Tribunal's decision to grant a waiver of pre-deposit and stay of proceedings reflects a balanced approach, considering both the petitioner's position and the Revenue's arguments, ensuring a fair opportunity for further deliberation on the matter.