2014 (12) TMI 1000 - AT - Service Tax

Waiver of pre deposit - activity of painting of residential premises and machinery - commercial and industrial construction services - Held that - Show cause notice has been issued to the appellant herein demanding Service Tax on the ground that that he was engaged in painting of residential premises, copper slag work and painting of machinery in the factory and the Revenue authorities sought to classify these services under commercial or industrial construction services . We find from the definition of the commercial or industrial construction services that the services that get covered under the said definition, would primarily be associated with the premises which are used for commerce or industry. In the case in hand, it is undisputed that the appellant has been engaged in the services of painting of residential premises, which, in our prima facie view, may not fall under the category of commercial or industrial construction services . We find that the appellant has made out a strong prima facie case for complete waiver of pre-deposit of the amounts involved. - Stay granted.

Summary

Issues Involved:
Waiver of pre-deposit of Service Tax, interest, and penalties under Sections 77 & 78 of Finance Act, 1994.

Analysis:

Issue 1: Pre-deposit of Service Tax, interest, and penalties
The appellant filed a Stay Petition seeking a waiver of pre-deposit of Service Tax amounting to Rs. 21,18,750, along with interest and penalties under Sections 77 & 78 of the Finance Act, 1994. The adjudicating authority and the first appellate authority had confirmed these amounts as dues based on the appellant's provision of commercial and industrial construction services, as defined in the Finance Act, 1994.

Issue 2: Interpretation of 'commercial or industrial construction services'
Upon hearing both sides and examining the records, it was noted that the show cause notice was issued to the appellant for demanding Service Tax based on activities like painting of residential premises, copper slag work, and painting of machinery in the factory. The Revenue authorities sought to classify these services under 'commercial or industrial construction services'. However, a detailed analysis revealed that the definition of 'commercial or industrial construction services' primarily covers services associated with premises used for commerce or industry. In this case, the appellant's services of painting residential premises may not fall under this category. The Tribunal found that the appellant had presented a strong prima facie case for a complete waiver of the pre-deposit amounts.

Conclusion:
After a thorough review of the submissions and records, the Tribunal allowed the application for waiver of pre-deposit of the amounts involved. It was decided that the recovery of the said amounts would be stayed until the appeal was disposed of. This decision was reached based on the understanding that the appellant's services did not align with the definition of 'commercial or industrial construction services', warranting a waiver of the pre-deposit.