2014 (5) TMI 800 - AT - Service Tax

Abatement under Notification No. 15/2004-ST and under Notification No. 1/2006-ST - Commercial and Industrial Construction services. - Revenue contends that assessee could not have availed abatement for some projects and at the same time could not pay full tax on other projects, availing the benefit of Cenvat credit on the latter type of projects - Held that - The adjudicating authority has not stated any evidence to prove that the applicant used inputs or capital goods on which cenvat credit was taken, in projects for which abatement was claimed. Adjudicating authority has put the onus of proving the converse of this position on the applicant and held that such onus has not been discharged. Abatement can be extended with respect to each project for which conditions in the notification are satisfied rather than all projects of an assessee taken together. Further, the applicant provided the details of credit taken. Without providing any evidence to even suggest that credit was taken on inputs and capital goods used for projects on which abatement was claimed, tax demand confirmed by the impugned order cannot be prima facie sustained. That is to say demand based on the probability and not on records cannot prima facie be sustained. Therefore, we grant waiver of pre-deposit of adjudged dues for admission of appeal and stay its recovery till the disposal of the appeal - Stay granted.

Issues:
1. Proper availing of abatement under Notification No. 15/2004-ST and Notification No. 1/2006-ST.
2. Allegation of improper abatement availing and simultaneous full tax payment with Cenvat credit benefit.
3. Confirmation of tax demand by the Revenue for the period from October 2004 to March 2008.
4. Onus of proof regarding the usage of inputs and capital goods in projects for which abatement was claimed.

Analysis:
1. The applicant, engaged in Commercial and Industrial Construction services, availed abatement under specific notifications for certain projects and paid service tax on a portion of gross receipts. However, the Revenue alleged improper abatement availing and full tax payment with Cenvat credit benefit on other projects, leading to a demand notice for tax amounting to Rs.2,72,72,209/- along with interest and penalty for the period from October 2004 to March 2008.

2. The adjudicating authority confirmed the tax demand primarily on the basis that some inputs and capital goods used by the applicant could be utilized in projects eligible for abatement as well as those where Cenvat credit was claimed. The authority held that the applicant failed to prove the non-usage of credited inputs in abatement projects. The applicant argued that they provided detailed credit usage information, and the burden of proving the contrary should not rest on them without any evidence from the Revenue supporting the claim of dual usage.

3. The Tribunal observed that abatement should be considered on a project-specific basis if the conditions are met, rather than aggregating all projects of an assessee. Since the applicant furnished credit details and there was no evidence suggesting the usage of credited inputs in abatement projects, the tax demand based on mere probability without concrete records was deemed unsustainable. Consequently, the Tribunal granted a waiver of pre-deposit for the admitted dues pending appeal and stayed the recovery until the appeal's disposal.

4. The Tribunal's decision highlighted the importance of substantiated evidence in tax disputes and emphasized that demands should be supported by factual records rather than assumptions or probabilities. By shifting the burden of proof to the Revenue to establish the dual usage of inputs, the Tribunal upheld the principle of fairness and evidentiary support in tax adjudications, ultimately providing relief to the appellant by granting the stay application.

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