2015 (12) TMI 876 - AT - Service Tax

Waiver of pre deposit - construction of power house building - Held that - Definition of works contract clearly indicates that contract which is in respect of execution of building dam, are excluded from work contract. We find that the contract which has been awarded to M/s Vishwaj Enery Pvt. Ltd. is for complete hydro project which could include construction of dam, Power House, etc. Prima facie applicant s service of construction of the power house falls within the contract work. We hold that the applicant has made out a case for waiver of pre-deposit of amounts involved and allow the application for waiver of pre-deposit of the amounts involved and recovery thereof is stayed till the disposal of the appeal - Stay granted.

Summary

Issues:
- Stay petition for waiver of pre-deposit of service tax, interest, and penalties
- Interpretation of works contract in relation to construction activities
- Determination of whether construction of a power house building falls within the definition of works contract

Analysis:
The case involved a stay petition seeking a waiver of pre-deposit of service tax, interest, and penalties confirmed by the authorities. The Tribunal considered the nature of the applicant's activity in constructing a power house building and whether it could be classified under the definition of works contract. Both parties were heard, and the records were examined to reach a conclusion.

Upon review, it was established that the contract awarded to the applicant was for executing a Works Contract Service on a Hydroproject, with a subcontract for the construction of power house buildings. The Tribunal analyzed the definition of works contract, which excludes contracts related to roads, airports, railways, transport terminals, bridges, tunnels, and dams. The contract in question encompassed a complete hydro project, potentially including the construction of a dam and power house.

The Tribunal found that the applicant's service of constructing the power house was likely within the scope of the contract work, as it was part of the broader hydro project. Consequently, the Tribunal held that the applicant had presented a case for the waiver of pre-deposit of the amounts involved. As a result, the application for waiver of pre-deposit was allowed, and the recovery of the amounts was stayed pending the appeal's disposal. The decision was made in open court and signed by the Members.