2015 (12) TMI 278 - AT - Service Tax

Waiver of pre deposit - Construction service - Held that - Service tax demanded under various categories for construction of both commercial as well as residential and other construction activities. Out of total demand, T-Sunami construction, construction of indoor stadium where the appellants have already been granted stay by this Tribunal in similar cases and construction carried out at Srilanka, residential staff quarters etc., may not be liable for service tax. After excluding the value of above services, prima facie, we find that the appellants have not made out a case for total waiver of pre-deposit of service tax on other construction activities. By following the decision of the Hon ble High Court of Rajasthan in the case of Arjun Industries Ltd. Vs. CC, Jaipur - 2015 (6) TMI 110 - RAJASTHAN HIGH COURT , and after excluding the value of services which are disputable as claimed by the appellants, we direct the applicants to make pre-deposit in both the appeals - Partial stay granted.

Summary

Issues: Determination of service tax liability on various construction activities and applicability of abatements and exemptions.

Analysis:

1. The case involved the demand and confirmation of service tax under different categories for construction activities like commercial or industrial construction service, construction of residential complex service, dredging service, and more. The adjudicating authority imposed penalties and appropriated a portion of the already paid amount towards service tax liability.

2. The appellant argued that certain projects, such as construction activities in Sri Lanka, construction of residential staff quarters, dredging services, and construction of indoor stadiums, should not be liable for service tax based on previous tribunal decisions and high court rulings.

3. On the contrary, the respondent contended that service tax is applicable to the construction activities undertaken by the appellants, with abatements already provided, and exceptions like construction of canals not being excluded.

4. After reviewing the arguments and records, the tribunal found that while service tax was demanded for various construction activities, certain projects like T-Sunami construction, indoor stadium construction (where stay was granted in similar cases), construction in Sri Lanka, and residential staff quarters might not attract service tax. Following the decision of the Hon'ble High Court of Rajasthan, the tribunal directed the appellants to make specific pre-deposits within a set timeline to proceed with the appeals.

5. The tribunal ordered pre-deposits of specific amounts for each appeal and stated that upon compliance, the balance amount of tax, interest, and penalty would be waived, and recovery stayed until the appeals' final disposal.

6. The judgment highlighted the importance of considering specific project details and applicable legal precedents to determine the service tax liability for different construction activities, emphasizing the need for pre-deposits as per the tribunal's directions to proceed with the appeals effectively.