2015 (1) TMI 86 - AT - Service Tax

Waiver of pre-deposit - Commercial and Industrial Construction Service - Invocation of extended period of limitation - Held that - Paryatak Bhavan owned and administered by the Andhra Pradesh Tourism Development Corporation does not appear to fall outside the purview of Commercial or Industrial Construction service primarily intended since there is admittedly a commercial activity of a hotel carried on in the premises. The material on record does not reveal that the activities in the Paryatak Bhavan are substantially for non-commercial or non-industrial purposes or are substantially for accommodating official/departmental establishments of the State. With regard to the extended period of limitation invoked for passing the adjudication order, the issue requires to be examined at the hearing of the appeal since much turns upon the surrounding facts and circumstances and as to whether petitioner s failure to file Returns in the context of the self-assessment regime is founded on the basis of a genuine misconception of the petitioner s liability or a mere uninformed or delusional assumption. - Partial stay grated.

Summary

Issues Involved:
1. Stay application seeking waiver of pre-deposit and stay of further proceedings based on an adjudication order for providing Commercial and Industrial Construction Service.
2. Whether the service provided falls under the definition of Commercial and Industrial Construction Service.
3. Justification for invoking the extended period of limitation under Section 73(1) of the Act.
4. Legality of levying service tax when VAT is paid for goods incorporated into the project.

Analysis:

Issue 1: Stay Application and Adjudication Order
The stay application was filed to seek waiver of pre-deposit and stay of further proceedings following an adjudication order by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad-II. The order imposed tax liability, interest, and penalties on the petitioner for providing Commercial and Industrial Construction Service for constructing Paryatak Bhavan for the Andhra Pradesh Tourism Development Corporation through a principal contractor. The penalties under Sections 77 and 78 were imposed, while the penalty under Section 76 was eschewed.

Issue 2: Classification of Service Provided
The appellant contended that the service provided to the Andhra Pradesh Tourism Development Corporation did not fall under the purview of Commercial and Industrial Construction Service as defined in Section 65(25b) of the Act. The appellant argued that the construction of Paryatak Bhavan did not amount to commercial or industrial construction. However, the Tribunal found that the activities in Paryatak Bhavan, including a commercial hotel, indicated a commercial purpose, thus rejecting the appellant's contention.

Issue 3: Extended Period of Limitation
Regarding the invocation of the extended period of limitation for passing the adjudication order, the Tribunal decided that this issue required further examination during the appeal hearing. The decision would depend on whether the petitioner's failure to file returns was due to a genuine misconception of liability or a mere uninformed assumption. The Tribunal emphasized the need to assess surrounding facts and circumstances before reaching a conclusion.

Issue 4: Legality of Levying Service Tax
The appellant argued that since VAT was paid for goods incorporated into the project, levying service tax was illegal. However, the Tribunal did not find merit in this argument and proceeded to grant waiver of pre-deposit and stay of further proceedings, subject to the petitioner remitting 50% of the assessed tax liability plus interest within a specified timeline.

In conclusion, the Tribunal disposed of the stay application by granting partial relief to the petitioner while emphasizing the need for further examination of certain issues during the appeal hearing.