2014 (2) TMI 955 - AT - Service Tax

Waiver of pre-deposit - Classification of servcie - Management and Repair Services or Works Contract Service - Cleaning Services - Construction Services of premises namely, hospitals and educational institutes - Held that - pplicant have failed to substantiate their claim that they were rendering services under Works Contract Service for the relevant period. Repairing & Maintenance of roads, Renovation Works for the railways and Civil Construction Services to non-commercial premises would fall within the exclusion Clause of taxable services viz. Commercial & Industrial Construction Service - Applicant could not able to make out a prima facie case for total waiver of predeposit of the dues adjudged. - stay granted partly.

Summary

Issues: Application seeking waiver of predeposit of Service Tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
1. The Applicant sought waiver of predeposit of Service Tax of Rs.93.08 lakh and equal penalty under Section 78 of the Finance Act, 1994. The total demand was broken down into amounts related to 'Management and Repair Services,' 'Cleaning Services,' and 'Works Contract Services.' The Advocate for the Applicant argued that certain services, such as 'Renovation Work for railways,' 'Maintenance & Repairing of Road Services,' and 'Construction Services of non-commercial premises,' should not be liable to service tax. The retrospective amendment in 2011 exempted repairing of roads from service tax. The Advocate also contended that activities like removal of wastes from a plant area do not directly fall under 'Cleaning Services.' However, the Applicant failed to provide relevant evidence or contracts for 'Works Contract Services,' citing financial hardship as a proprietorship concern.

2. The Revenue's representative argued that the Commissioner confirmed the service tax on various taxable services provided by the Applicant, including 'Cleaning Services' and 'Works Contract Services.' The scope of works mentioned in the Work Order indicated that the Applicant was responsible for maintaining and supervising the plant area continuously, justifying the classification under 'Cleaning Services.' The Applicant could not furnish documentary evidence to support their claim for 'Works Contract Services.'

3. After hearing both sides and examining the records, the Tribunal found that the Applicant failed to substantiate their claim for providing 'Works Contract Services,' leading to a demand of Rs.32.94 lakh. The Tribunal was not convinced by the Applicant's argument regarding 'Cleaning Services' based on the scope of works outlined in the Work Order. However, the Tribunal acknowledged the exclusion clause for certain services like 'Repairing & Maintenance of roads,' 'Renovation Works for railways,' and 'Civil Construction Services to non-commercial premises' under 'Commercial & Industrial Construction Service.' Due to the lack of a prima facie case for total waiver of predeposit, the Tribunal directed the Applicant to deposit Rs.15.00 lakh within eight weeks. Upon deposit, the balance dues would be waived, and recovery stayed during the appeal's pendency, with a compliance report due on a specified date to avoid dismissal of the Appeal.