2014 (2) TMI 43 - AT - Service Tax

Availment of benefit of Notification No. 1/2006-ST dated 01.3.2006 - Demand of service tax - Commercial and Industrial Construction Services - Held that - appellant are availing the Cenvat credit of input/ input services and for some, they are not availing and in respect of those sites, where they are not availing the Cenvat credit, they have claimed the abatement. Prima facie, we find that the said notification has to be applied to the service provider as such and does not indicate anything as to the contract wise application. We find that the issue is debatable one and needs to be gone in detail. Accordingly, we are of the view that appellant has not made out a case for the complete waiver of the amounts involved - Conditional stay granted.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of confirmed service tax, interest, and penalties.
2. Applicability of Notification No. 1/2006-ST on availing abatement and Cenvat credit for Commercial and Industrial Construction Services.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of Rs. 4,30,921/- confirmed as service tax, interest, and penalties. The lower authorities confirmed the amounts as service tax liability, alleging that the appellant, while availing the benefit of Notification No. 1/2006-ST for abatement, also utilized Cenvat credit on inputs, making them ineligible for the abatement. The appellant argued that they only availed Cenvat credit for inputs at certain sites and not at others where they claimed the abatement. They contended that the notification should apply to the service provider as a whole, not on a contract-wise basis. The Tribunal found the issue debatable and requiring detailed examination. Consequently, the appellant was directed to deposit Rs. 1,00,000/- for the appeal's hearing and disposal within eight weeks, with compliance to be reported by a specified date. Upon compliance, the waiver of pre-deposit for the remaining amounts was allowed, and recovery stayed pending appeal disposal.

In conclusion, the Tribunal determined that the issue revolved around the interpretation and application of Notification No. 1/2006-ST concerning the appellant's eligibility for abatement while availing Cenvat credit on inputs for Commercial and Industrial Construction Services. The Tribunal acknowledged the appellant's argument regarding selective availing of Cenvat credit at specific sites and the claim of abatement at others. However, the Tribunal emphasized the need for a detailed examination of the matter due to its debatable nature. Consequently, the Tribunal ordered a partial deposit for the appeal process and allowed the waiver of pre-deposit for the remaining amounts subject to compliance, with recovery stayed until the appeal's final disposal.