2014 (2) TMI 1128 - AT - Service Tax

Waiver of pre-deposit - Stay recovery of the tax - Site formation and clearance excavation and earth moving and demolition service - Held that - site formation and clearance excavation and earth moving and demolition service became taxable with effect from 16.6.2005. We also find from the order in original that the third work order was dated 17th June 2005 and amount of Rs.1,20,37,101/- was the gross amount against the services rendered by the applicant. Out of which Rs.86,28,180/- had been received by the applicant towards services rendered after 16th June 2005. Prima facie this amount is a taxable as the work order itself is after 16th June 2005. Therefore the applicant does not have a case for complete waiver of pre-deposit - Conditional stay granted.

Summary

Issues:
1. Application for waiver of pre-deposit and stay recovery of tax, interest, and penalties.
2. Tax liability on site formation, clearance excavation, earth moving, and demolition services.
3. Interpretation of service tax applicability based on service provision and payment dates.

Analysis:
1. The case involves an application by M/s Tyagi Associates seeking waiver of pre-deposit and stay recovery of tax, interest, and penalties imposed against them. The applicant received a Show Cause Notice demanding service tax on specific services, which was confirmed by the Joint Commissioner along with interest and penalties under Sections 77 and 78 of the Act. The Commissioner (Appeals) upheld the decision, leading to the appeal before the Tribunal.

2. The main contention raised by the applicant was that their activities were not covered under taxable service but were part of construction services as per their agreement with another company. They argued that the services were provided before the new service tax regime came into effect on 16th June 2005. However, the Revenue contended that even though bills were raised before the specified date, the services were provided and payments received after 16th June 2005, making them liable for service tax.

3. Upon considering the arguments from both sides, the Tribunal found that the services in question became taxable from 16th June 2005. The third work order, crucial to the case, was dated 17th June 2005, with a significant amount received by the applicant for services rendered after the specified date. Consequently, the Tribunal ruled that the applicant did not qualify for a complete waiver of pre-deposit. They directed the applicant to deposit a specific amount within a given timeframe and granted a stay against the recovery of the remaining dues pending the appeal's disposal.