2015 (11) TMI 564 - AT - Service Tax

Waiver of pre deposit - erection, commissioning or installation service - benefit of 67% abatement - Held that - In view of the judgment of the Hon ble Supreme Court in the case of Larsen & Toubro Limited holding that works contracts were not liable to service tax prior to 01.07.2006, the demand pertaining to the period upto 31.05.2007 is prima-facie not sustainable. We also observe that rendition of service involved supply of goods and therefore prima-facie the appellant was entitled to the benefit of Notification No. 1/2006-ST or 12/2003-ST. Having regard to these facts and also keeping in view the contention of the appellant about non-invocability of extended period, we are of the view that pre-deposit ordered by Commissioner (Appeals) was on the higher side. - Matter remanded back - Decided partly in favour of assessee.

Summary

Issues:
Stay application against modification of stay order requiring pre-deposit under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Applicability of abatement, liability of service tax on works contracts, benefit of Notifications No. 1/2006-ST and 12/2003-ST, invocability of extended period for demand.

Analysis:
The judgment pertains to a stay application filed against the modification of a stay order that mandated a pre-deposit under specific legal provisions. The appellant argued that they were entitled to a 67% abatement and that the service provided did not fall under the category for which service tax was demanded. They contended that there was no suppression of facts, making the extended period inapplicable.

Upon considering the contentions, the Tribunal referred to a Supreme Court judgment stating that works contracts were not subject to service tax before a specific date. Consequently, the demand for the period preceding this date was deemed unsustainable. The Tribunal also noted that the service involved both goods and services, potentially entitling the appellant to certain benefits under Notifications. In light of these findings and the appellant's argument against the extended period, the Tribunal concluded that the pre-deposit ordered was excessive.

As a result, the Tribunal remanded the case back to the Commissioner (Appeals) for a merit-based review, with the condition that the appellant make a pre-deposit of 10% of the disputed service tax liability. The appellant was required to confirm this deposit to the Commissioner within thirty days of the order. The stay application and appeal were disposed of based on these terms, allowing for a reevaluation of the case on its merits.