2015 (7) TMI 758 - AT - Service Tax

Waiver of pre deposit - construction of complex service - construction of independent residential units for Rajasthan Housing Board and construction of the corporate office of Ajmer Vidyut Vitaran Nigam Limited - Held that - Prima-facie, construction of a corporate office for Ajmer Vidyut Vitaran Nigam Limited would not amount to rendition of a taxable service in relation to transmission of electricity, even though construction of the corporate office is in respect of a transmission or distribution agency - no other measure of assessing the extent of this liability since neither the show cause notice nor the impugned order segregate the quantum of consideration received by the appellant from the activity of construction of residential units and construction of the corporate office. - appellant is directed to pre-deposit ₹ 18 lakhs plus the proportionate interest thereon within six weeks - Partial stay granted.

Summary

Issues:
1. Assessment of service tax for construction of complex service
2. Segregation of consideration received for different taxable services
3. Exemption of taxable services in relation to transmission of electricity
4. Exclusion of goods component in works contract for service tax liability

Analysis:
1. The judgment pertains to the assessment of service tax on the construction of complex services provided by the petitioner for two distinct projects. The petitioner was assessed a service tax amount for constructing independent residential units for Rajasthan Housing Board and the corporate office of Ajmer Vidyut Vitaran Nigam Limited based on show cause notices. The impugned order did not segregate the consideration received for these two services, leading to a challenge by the petitioner.

2. Regarding the construction of independent residential units, the petitioner relied on a previous decision to contest the demand. For the construction of the corporate office for Ajmer Vidyut Vitaran Nigam Limited, the petitioner argued for exemption under Notification No. 45/2010-ST related to services in relation to transmission of electricity.

3. The judgment observed that construction of a corporate office for a transmission or distribution agency like Ajmer Vidyut Vitaran Nigam Limited might not constitute a taxable service in relation to transmission of electricity. The petitioner also contended that as the construction work was a works contract involving supply of goods and services, the value of the goods component should be excluded for service tax liability under Notification No. 15/2004-ST.

4. The petitioner's counsel calculated the service tax liability for the construction of the corporate office after availing the benefit of a rebate under Notification No. 12/2004-ST. The judgment directed the petitioner to pre-deposit the calculated amount within a specified timeframe to stay further recovery proceedings during the appeal process, due to the lack of segregation of consideration in the show cause notice and impugned order.

In conclusion, the judgment addressed the issues of service tax assessment for construction services, segregation of consideration for different projects, exemption related to transmission of electricity services, and the exclusion of goods component in works contracts for determining service tax liability.