2014 (2) TMI 96 - AT - Service Tax

Waiver of pre-deposit of tax - Construction of residential complex service and commercial or industrial construction service - Held that - Demand was raised without giving consideration of abatement of 67% under Notification No.1/2006-ST - Appellant directed to make a pre deposit - Conditional stay granted.

Summary

Issues: Application for waiver of pre-deposit of tax on construction services, consideration of abatement benefit, double counting of tax, sustainability of tax on road construction, financial hardship of the applicant.

Analysis:
1. The applicant filed an application seeking waiver of pre-deposit of tax amounting to Rs.5,05,48,965/- along with interest and penalty, related to construction services provided between October 2004 to March 2009. The demand was raised on construction of residential complex service and commercial or industrial construction service.

2. The appellant argued that the demand did not consider the abatement of 67% under Notification No.1/2006-ST and highlighted the issue of double counting of tax due to the use of documents from various sources. Additionally, the appellant contended that the tax on road construction was not sustainable. The appellant presented a calculation sheet suggesting that the demand should be reduced to around Rs.65,41,878/-, which included tax on road construction of Rs. 30 lakhs.

3. The respondent, reiterating the Commissioner's findings, argued that the appellant failed to provide supporting documents for their contentions. The respondent opposed extending any benefit beyond abatement, citing the lack of document submission by the appellant.

4. After considering the arguments from both sides and reviewing the statements, the Tribunal determined that the appellant should deposit a sum of Rs.35,00,000/-. Taking into account the financial hardship claimed by the appellant, the Tribunal modified its initial decision based on the appellant's corrected submission. Consequently, the appellant was directed to deposit Rs.65,00,000/- within 8 weeks. Upon compliance, the predeposit of the remaining tax, interest, and penalty was waived, and the recovery of the waived amount was stayed pending the appeal process.

This detailed analysis of the judgment addresses the issues raised in the application for waiver of pre-deposit of tax on construction services, the consideration of abatement benefit, concerns regarding double counting of tax, the sustainability of tax on road construction, and the assessment of the appellant's financial hardship.