2015 (7) TMI 675 - AT - Service Tax

Waiver of pre deposit - Construction of complex service - Evasion of service tax - wilful mis-statement/suppression of facts - Held that - residential complexes were for defence personnel or for the personnel of Gautum Budh University. The contracts for making the residential complexes were awarded to RITES Ltd., NBCC and IRCON International which in turn engaged the appellant for building the said complexes and the payment to the appellant were also made by them (i.e. RITES Ltd., NBCC and IRCON International). Thus the impugned service was provided by the appellant (as sub-contractor) to the said main contractors. It is also seen that the appellant never declared to the department about the rendition of the said service - appellant was engaged by RITES/NBCC/IRCON International (and not directly by the Govt./Gautam Budh University) for the said construction and therefore is not covered under the said exclusion clause and there is hardly any interpretational ambiguity in this regard which prima facie makes the said evasion deliberate. - Partial stay granted.

Summary

Issues:
1. Whether the appellant is liable to pay service tax for providing construction of complex service.
2. Whether the appellant's construction of residential complexes for defense personnel and university staff exempts it from service tax liability.
3. Whether the appellant's engagement by main contractors for building residential complexes constitutes deliberate evasion of service tax.

Analysis:
1. The appellate tribunal considered a case where a stay application and appeal were filed against a primary order confirming a service tax demand for construction of complex service. The appellant was alleged to have evaded service tax through wilful mis-statement/suppression of facts.

2. The appellant argued that the residential complexes were built for defense personnel and university staff, claiming exemption from service tax. However, the tribunal found that the appellant, engaged by main contractors, provided the impugned service as a sub-contractor, not directly engaged by the government or university. The definition of residential complex under Section 65(91a) did not exempt the appellant, as it was not directly engaged by the end-users for personal use.

3. The tribunal ruled that the appellant's engagement by RITES Ltd., NBCC, and IRCON International, without declaration to the department, indicated deliberate evasion of service tax. The tribunal ordered pre-deposit of the entire service tax amount with interest, recognizing the revenue's prima facie case. Penalties were stayed pending compliance, with dismissal of the appeal for non-payment.

This detailed analysis covers the issues involved in the legal judgment, highlighting the tribunal's reasoning and decision regarding the appellant's liability for service tax on construction services provided.