2014 (7) TMI 325 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Commercial or Industrial Construction Service - Held that - Undisputedly the Applicant had constructed residential quarters for CISF personnel on being engaged by M/s. I.O.C.L. It is not in dispute that such residential accommodation are used by M/s. CISF. Prima facie, we find that the Ld. Adjudicating Authority had confirmed the demand that besides construction of residential quarters, the Applicant along with said quarters had also constructed barracks, quarter guard room and armoury stores, welfare centre & multipurpose hall, shops, garages etc., which would not strictly fall under the category of residential complexes services. Prima facie we do not find force in the said contention of the Revenue inasmuch as that a residential complex would definitely include incidental and ancillary facilities attached to the residential quarters so as to make the residential complex livable. However, we are of the view that the Applicant had rendered services under the category of Commercial and Industrial Construction Services by raising boundary walls for M/s. Jindal Stainless Steel Ltd., Kalinganagar Industrial Complex - Applicant could not able to make out a case for total waiver of pre-deposit of dues adjudged - Conditional stay granted.

Summary

Issues:
1. Application seeking waiver of pre-deposit of Service Tax and penalties under Sections 77 and 78 of the Finance Act, 1994.
2. Interpretation of whether construction of residential complexes for CISF attracts Service Tax.
3. Determining if construction of boundary wall for a specific company falls under "Commercial or Industrial Construction Service."
4. Assessment of the services provided by the Applicant and the applicability of different categories of construction services.

Analysis:
1. The Application sought waiver of pre-deposit of Service Tax amounting to &8377; 60.99 Lakhs along with penalties under Sections 77 and 78 of the Finance Act, 1994. The Applicant contended that a significant portion of the demand related to construction of residential complexes for CISF and a boundary wall for another company. The Applicant referenced relevant case laws to support their arguments.

2. The Applicant argued that construction of residential complexes for CISF should not attract Service Tax under the specific category. The Revenue, however, pointed out additional constructions beyond residential quarters, claiming they do not fall under the residential complexes category. The Tribunal acknowledged the ancillary facilities attached to residential quarters but determined that the Applicant also provided services under "Commercial and Industrial Construction Services" for a different project.

3. The Tribunal examined the nature of services provided by the Applicant, emphasizing the distinction between construction for residential purposes and commercial/industrial projects. While acknowledging the construction of residential quarters for CISF, the Tribunal found that other structures built by the Applicant did not strictly align with the definition of residential complexes. The construction of a boundary wall for a specific company was deemed to fall under "Commercial and Industrial Construction Services."

4. After hearing both sides and reviewing the records, the Tribunal concluded that the Applicant did not qualify for a total waiver of pre-deposit. Instead, the Tribunal directed the Applicant to deposit &8377; 10.00 Lakhs within a specified period, with the balance dues being waived upon compliance. The recovery of the waived amount was stayed during the pendency of the Appeal, with a warning of dismissal if the specified deposit was not made. The decision aimed to balance the interests of the Revenue while addressing the specifics of the services provided by the Applicant.