2014 (4) TMI 222 - AT - Service Tax

Waiver of service tax - Valuation - Commercial or Industrial Construction Services - Method of valuation to be adopted for discharge of service tax liability - Held that - issue needs deeper consideration, at the same time the Larger Bench decision of the Tribunal in the case of Bhayana Builders Pvt. Limited 2013 (9) TMI 294 - CESTAT NEW DELHI , helps the appellants for the proposition that the cost of free supplies of the materials need not be included for discharge of service tax liability, which is being contested by the learned departmental representative stating that the appellant has not included the value of free supply of the materials. In our view the issue is contestable and arguable hence, require some time for coming to a conclusion - Conditional stay granted.

Summary

Issues:
1. Waiver of service tax liability, interest, and penalties.
2. Valuation of services under 'Commercial or Industrial Construction Services'.
3. Financial hardship of the appellant.
4. Pre-deposit requirement and stay on recovery.

Analysis:

Issue 1: Waiver of service tax liability, interest, and penalties
The appellant filed a stay petition seeking the waiver of an amount confirmed as service tax liability, interest, and penalties. The service tax liability was confirmed for the period September 2004 to January 2009 under the category of 'Commercial or Industrial Construction Services'. The appellant argued that the valuation adopted by the Revenue was erroneous as it did not consider certain benefits like income tax price and reduction of value of free supplies of cement and steel. The appellant also highlighted financial hardship and closure of business, relying on income tax returns. The departmental representative contended that since services were provided, the service tax liability was valid.

Issue 2: Valuation of services under 'Commercial or Industrial Construction Services'
Upon reviewing the submissions and records, the Tribunal found that the services rendered by the appellant fell under the category of 'Commercial or Industrial Construction Services'. The appellant had not discharged the service tax liability for the relevant period. The Tribunal acknowledged the need for deeper consideration regarding the correct valuation for service tax liability. Referring to a previous decision, the Tribunal noted a contestable issue regarding the inclusion of the value of free supplies of materials for tax liability discharge.

Issue 3: Financial hardship of the appellant
Considering the financial hardship claimed by the appellant and the need for further examination of the valuation issue, the Tribunal directed the appellant to make a pre-deposit of a specified amount within a given timeframe. The compliance was to be reported to the Deputy Registrar for further action. The Tribunal allowed the waiver of the balance amounts subject to the specified compliance, staying the recovery until the appeal's disposal.

Issue 4: Pre-deposit requirement and stay on recovery
The Tribunal imposed a pre-deposit condition on the appellant while granting a stay on the recovery of the balance amounts involved until the appeal's final resolution. The compliance deadline and reporting instructions were clearly outlined to ensure procedural adherence and timely review of the case.

This detailed analysis of the judgment provides a comprehensive overview of the issues addressed, arguments presented, and decisions made by the Tribunal in the context of the appellant's petition for waiver of service tax liability and related penalties.