2014 (4) TMI 61 - AT - Service Tax

Waiver of pre deposit - excavation for foundation in soil & soft rock including tree removing. - Held that - in addition to amount of Rs. 2,59,158/- paid by the appellant, the appellant has also paid an amount of Rs. 1,17,151/- as interest on the Service Tax demand of Rs. 2,59,158/-. However, this payment has not been adjusted against the Service Tax demand or the interest thereon. We have perused the work order given to the appellant and as per the work order, the activity undertaken by the appellant is excavation for foundation in soil & soft rock including tree removing. Therefore, the activity would be squarely covered by the definition of Site preparation, excavation and earth moving, demolition service . Therefore, the contention of the learned Counsel for the appellant that they are not liable to Service tax is prima facie not correct. Hence, the appellant has not made out a case for complete waiver of pre-deposit of the dues adjudged against them - Conditional stay granted.

Summary

Issues:
Service Tax demand confirmation, Nature of activity undertaken by the appellant, Applicability of tax laws, Grant of stay petition.

Service Tax Demand Confirmation:
The judgment pertains to an appeal and stay petition against an Order-in-Appeal confirming a Service Tax demand of Rs. 5,27,493/- against the appellant M/s Sachin Construction, along with interest and penalties imposed. The appellant contested the demand, arguing that the activity undertaken was 'supply of tangible goods service' and not 'excavation activity,' seeking non-taxable status due to the construction being for an educational institution. The Revenue, represented by the Addl. Commissioner, maintained that the activity fell within the definition of 'Site preparation, excavation and earthmoving, demolition service' under relevant tax laws. The tribunal analyzed the work order and concluded that the activity of excavation for foundation was indeed covered by the tax laws, denying complete waiver of the dues adjudged against the appellant.

Nature of Activity Undertaken:
The appellant claimed that the nature of their activity was mischaracterized, contending that it was not excavation but 'supply of tangible goods service.' However, the tribunal, after reviewing the work order, determined that the activity of excavation for foundation in soil & soft rock fell within the definition of 'Site preparation, excavation and earth moving, demolition service.' This analysis led to the rejection of the appellant's argument against the Service Tax demand, as the activity was deemed taxable under the law.

Applicability of Tax Laws:
The judgment delved into the interpretation and application of tax laws concerning the classification of services provided by the appellant. The tribunal scrutinized the provisions of the Finance Act, 1994, specifically Sections 65(97a) and 65(105)(zzza), to ascertain the taxability of the excavation activity undertaken by M/s Sachin Construction. By aligning the activity with the statutory definition of taxable services, the tribunal upheld the Service Tax demand and denied the appellant's plea for non-taxable status.

Grant of Stay Petition:
In addressing the stay petition, the tribunal directed the appellant to make a pre-deposit of Rs. 1.5 lakhs, in addition to the amount already paid, within six weeks. Compliance with this directive would result in the waiver of the balance amount of dues adjudged against the appellant, with recovery stayed during the pendency of the appeal. This decision balanced the interests of both parties pending the final resolution of the appeal process.