2015 (11) TMI 568 - AT - Service Tax

Waiver of pre deposit - Maintenance or repair service/ Works Contract Services/ Commercial or Industrial Constriction Service (CICS) - Held that - As the services were rendered under works contracts, they were not liable to service tax upto 31.05.2006 as works contract service came into existence w.e.f. 01.06.2007. Further, we notice that benefit of composition scheme for works contract service has not been extended although the rendition of service involved supply of goods and so prima-facie the appellant was entitled to the said benefits which by itself would bring down the demand to less than 33% of the amount confirmed. The appellant has also raised the issue of time bar although a decision thereon will require detailed discussion which can be taken up only at the time of final hearing. The appellant has deposited ₹ 4.17 lakhs and some part of the demand is claimed to be in respect of sale of goods which is not sustainable. - pre-deposit of ₹ 17.5 lakhs alongwith proportionate interest would meet the requirement of Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - Partial stay granted.

Issues involved:
1. Taxability of services under works contracts pre- and post-01.06.2007
2. Demand of service tax on specific services rendered
3. Benefit of composition scheme for works contract services
4. Time bar for raising certain issues
5. Sufficiency of documentary evidence supporting contentions

Analysis:

1. Taxability of services under works contracts pre- and post-01.06.2007:
The appellant contended that services rendered under works contracts were not taxable before 01.06.2007 when works contract services became taxable. The tribunal found merit in this argument, stating that services rendered under works contracts were not liable to service tax until 31.05.2006. The benefit of the composition scheme for works contract services, which would have reduced the demand significantly, was not extended to the appellant.

2. Demand of service tax on specific services rendered:
The appellant disputed the demand of service tax on specific services, including amounts related to services rendered at airports and works contracts for non-commercial buildings and personal use complexes. The tribunal noted these contentions but highlighted the lack of documentary evidence supporting the appellant's claims. The tribunal acknowledged the appellant's partial deposit and deemed the demand related to the sale of goods as unsustainable.

3. Benefit of composition scheme for works contract services:
The appellant argued for the application of the composition scheme to reduce the demand, as the service involved the supply of goods. The tribunal agreed that the appellant was entitled to the benefits of the composition scheme, which would have significantly lowered the confirmed amount. However, the tribunal emphasized the need for detailed discussion on the issue of time bar during the final hearing.

4. Time bar for raising certain issues:
While the appellant raised the issue of time bar, the tribunal deferred a detailed discussion on this matter to the final hearing. The tribunal acknowledged the complexity of this issue and refrained from making a conclusive decision at the current stage, emphasizing that a detailed discussion would be necessary later.

5. Sufficiency of documentary evidence supporting contentions:
The tribunal noted that the appellant failed to provide documentary evidence to support its contentions, such as copies of works contracts and evidence of service tax computation under different categories. The lack of supporting documentation weakened the appellant's case, as the adjudicating authority had based its findings on available records. The tribunal directed the appellant to make a pre-deposit to meet statutory requirements, highlighting the importance of complying with the legal provisions.

In conclusion, the tribunal directed the appellant to make a pre-deposit to stay the recovery of the balance adjudicated liability during the appeal process. Failure to comply would result in the dismissal of the appeal for non-payment. The detailed analysis of each issue highlighted the complexities of the case and the importance of providing sufficient documentary evidence to support legal contentions.

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