2013 (12) TMI 1127 - AT - Service Tax

Stay Application - Demand of service tax - Erection and commissioning service - Held that - applicant is contesting the demand of tax liability and they are also disputing the quantification of demand. The learned counsel produced the balance sheet showing the loss. We find that the deposit already made by the applicant is sufficient for waiver of balance amount of tax, interest and penalty. Accordingly, we grant waiver of pre-deposit of balance tax, interest and penalty and stay its recovery during the pendency of the appeal - Prima facie case in favour of assessee - Stay granted.

Summary

Issues Involved:
Waiver of pre-deposit of tax, interest, and penalty in a case related to 'Erection and Commissioning Service' under the category of overhead lines from windmill to the Tamil Nadu Electricity Board for the period 2004-05.

Analysis:

1. Tax Liability Dispute:
The applicant sought waiver of pre-deposit of tax amounting to Rs.23,94,748/- along with interest and penalty, contending that the tax was demanded under the category of 'Erection and Commissioning Service'. The applicant, a sub-contractor, argued that they rendered services related to overhead lines from windmill to the Tamil Nadu Electricity Board. The applicant disputed both the tax liability for the period 2004-05 and the quantification of the demand. The learned counsel highlighted the applicant's financial hardship and the deposit of Rs.12,57,725/- towards tax. On the other hand, the learned AR argued that the applicant had admitted the tax liability and should deposit the entire amount, estimating the tax liability for the year 2004-05 to be around Rs.17 lakhs.

2. Tribunal's Decision:
Upon reviewing the submissions and records, the Tribunal acknowledged that the applicant contested the tax liability and disputed the quantification of the demand. The applicant presented a balance sheet indicating a loss, and the Tribunal found the deposit already made by the applicant to be sufficient for waiving the balance amount of tax, interest, and penalty. Consequently, the Tribunal granted waiver of pre-deposit of the remaining tax, interest, and penalty, and stayed the recovery during the pendency of the appeal, thereby allowing the stay application.

This judgment by the Appellate Tribunal CESTAT CHENNAI, delivered by Shri. P.K. Das, addressed the dispute regarding tax liability and quantification in the context of 'Erection and Commissioning Service'. The decision to grant waiver of pre-deposit and stay the recovery reflected a balanced approach considering the applicant's contentions and financial circumstances.