2007 (8) TMI 83 - AT - Service Tax

Revenue contended that the design and engineering is in respect of goods manufactured by the applicant is part of manufacturing and appellant liable for service tax payment Tribunal opinion is contrary to fact and pre-deposit of demand and penalties waived

Summary

Issues:
- Waiver of pre-deposit of Service Tax amount and penalties.

Analysis:
The applicant filed an application seeking waiver of pre-deposit of Service Tax amounting to Rs. 63,17,721/- along with penalties. The dispute arose from the Revenue treating the applicant as a provider of consulting engineer service based on a separate price for design and engineering in the contract price break up. The Revenue contended that Service Tax was payable on this amount. However, the applicant argued that the design and engineering services were provided in the context of manufacturing goods in their own factory for the Bhilai Steel Plant. The applicant cited precedents, including the Tribunal's decision in the case of Daelim Industrial Co. v. CCE, where a similar demand for Service Tax was set aside. The applicant also referenced the Tribunal's decision in the case of CCE v. Larsen & Toubro Ltd. and other cases to support their position.

The Revenue, on the other hand, relied on conflicting Tribunal decisions in cases such as CCE v. BSBK P. Ltd. and Indian Farmers Fertilizer Co-Op. Ltd. where a different view was taken on similar issues. Given the conflicting opinions within the Tribunal, the Tribunal observed that the applicant had a strong prima facie case in their favor. Consequently, the Tribunal decided to waive the pre-deposit of the Service Tax amount and penalties for the appeal hearing, allowing the stay petition. The decision was made based on the strength of the applicant's case in light of the conflicting Tribunal judgments on the same issue.

In conclusion, the Tribunal granted the applicant's request for waiver of pre-deposit of the Service Tax amount and penalties, considering the conflicting opinions within the Tribunal on the issue at hand. The decision was made to ensure a fair hearing of the appeal, acknowledging the strength of the applicant's case based on relevant legal precedents and arguments presented.