2015 (10) TMI 55 - AT - Service Tax

Waiver of pre deposit - Commercial or Industrial Construction Service - 67% abatement - Held that - Work done for the UP Jal Nigam would not be covered under CICS, prima facie the same would be the case with regard to the work done for Delhi Jal Board. The appellant has an arguable case for the work done for Haryana Urban Development Authority relating to construction of 50 MLD main sewage pumping station for supplying treated water to residential localities. However construction of effluent treatment plant for recycling of treated waste water supplied to industrial units in Karnataka Industrial Area would prima facie fall under CICS. There is also force in the contention of the appellant that the demand in respect of first Show Cause Notice for the period October, 2005 to March, 2010 involve supply of goods and therefore 67% abatement was available to it. - a pre-deposit of ₹ 25 lakhs with proportionate interest would meet the requirements of section 35F Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - Partial stay granted.

Summary

Issues:
1. Service tax demand under "Commercial or Industrial Construction Service" (CICS) confirmed in the Order in-Original.
2. Components of the impugned demand involving various projects and activities.
3. Contention of the Appellant regarding abatement, scope of CICS for certain projects, and absence of suppression of facts.
4. Departmental Representative's argument on the classification of work done for different bodies under CICS.
5. Consideration of contentions and decision on pre-deposit amount and stay of recovery.

Analysis:

1. The judgment deals with a stay application and appeal against a service tax demand confirmed under "Commercial or Industrial Construction Service" (CICS) in the Order in-Original dated 24.08.2013 amounting to Rs. 4,29,65,586 along with interest and penalties.

2. The impugned demand consists of various components related to different projects and activities, such as construction of sewage pumping stations, effluent treatment plants, and water supply pipelines for residential and industrial localities by entities like Delhi Jal Board, Haryana Urban Development Authority, Karnataka Industrial Areas Development Board, etc.

3. The Appellant contends that certain aspects, like the absence of 67% abatement, projects not falling under CICS scope, and lack of suppression of facts, should be considered. They argue that work done for certain bodies, like the construction of sewage pumping stations for residential localities, should not be classified under CICS.

4. The Departmental Representative argues that work done for commercial bodies like Karnataka Industrial Area Development Board should be counted under CICS, but concedes that work for UP Jal Nigam would not fall under this category. They present differing views on the classification of projects under CICS based on the nature of the entities involved.

5. After considering both sides' contentions, the Tribunal finds that a pre-deposit of Rs. 25 lakhs with proportionate interest is necessary to meet legal requirements. The Tribunal orders this pre-deposit within four weeks and stays the recovery of remaining liabilities during the appeal's pendency. Failure to comply with the pre-deposit requirement would result in the dismissal of the appeals.

This detailed analysis covers the issues raised in the judgment, including the arguments presented by the parties and the Tribunal's decision regarding the pre-deposit amount and stay of recovery.