2015 (1) TMI 593 - AT - Service Tax

Waiver of pre deposit - Evasion of service tax - huge amounts shown in exempted service column of ST-3 return - Held that - appellant has shown value of exempted service in returns and according to the appellant, they had shown the receipt for consideration of this service as exempted as they entertained a bona fide belief that the work undertaken by the appellant for Govt. of Andhra Pradesh is exempted. Per contra, learned A.R. submitted that there is no basis for such belief. Moreover, the Order-in-Original also indicated the fact that the appellant has shown huge amounts in exempted service column and even then no enquiry was made by the department so that show-cause notice could be issued in time. Moreover, it cannot be said that the appellant could not entertain a bona fide belief that in view of the fact that the Tribunal itself has allowed unconditional waiver of pre-deposit and stay against recovery for similar items of work. Therefore, we consider that the appellant has made out a prima facie case for waiver of pre-deposit and stay against recovery during pendency of the appeal. - Decision of assessee s previous case relied upon 2013 (10) TMI 435 - CESTAT BANGALORE - Stay granted.

Summary

Issues: Liability to pay service tax on Turnkey Projects including EPC projects; Invocation of extended period for demanding service tax; Imposition of penalty for suppression of facts; Prima facie case for waiver of pre-deposit and stay against recovery.

Liability to pay service tax on Turnkey Projects including EPC projects:
The judgment revolves around the liability of the appellant, a Joint Venture undertaking Turnkey Projects, to pay service tax. The appellant, involved in projects for the Government of Andhra Pradesh, argued that they believed the services provided were exempted. The Commissioner imposed penalty for suppression of facts, citing the appellant's huge amounts shown in the exempted service column. However, the appellant contended that their belief in exemption was supported by the Tribunal's previous order granting waiver of pre-deposit and stay against recovery for similar work. The Tribunal found the appellant's belief to be bona fide, indicating a prima facie case for waiver.

Invocation of extended period for demanding service tax:
The show-cause notice invoked the extended period for demanding service tax due to alleged suppression of facts by the appellant. The Commissioner upheld this proposition and imposed a penalty equal to the service tax demanded. The appellant argued that they had shown the value of exempted services in their returns, believing the work for the Government of Andhra Pradesh to be exempted. The Tribunal noted similarities with a previous case where waiver of pre-deposit was granted, indicating a favorable view towards the appellant's position.

Imposition of penalty for suppression of facts:
The Commissioner imposed a penalty equal to the service tax demanded, citing suppression of facts by the appellant. The appellant argued that they had shown exempted service amounts in their returns based on a bona fide belief in the exemption due to the nature of their work for the government. The Tribunal considered the appellant's position, noting the lack of inquiry by the department despite the amounts shown in the exempted service column. The Tribunal found the appellant's belief to be reasonable, supported by the previous waiver of pre-deposit for similar work.

Prima facie case for waiver of pre-deposit and stay against recovery:
The Tribunal considered the appellant's case for waiver of pre-deposit and stay against recovery during the appeal process. The appellant demonstrated a bona fide belief in the exemption of their services for the Government of Andhra Pradesh, supported by the Tribunal's previous order granting waiver for similar work. The Tribunal found the appellant's position to establish a prima facie case for waiver, indicating a favorable view towards granting relief during the pendency of the appeal.