2015 (12) TMI 1013 - AT - Service Tax

Waiver of pre deposit - Commercial or Industrial Construction service - Held that - Appellant is a sub-contractor to M/s L & T Limited for construction of transport terminal for M/s Reliance Industries Ltd. Apart from appreciating the fact that definition of Commercial or Industrial Construction does not include the service provided in respect of transport terminal, we also find that demands were raised against the main contractor i.e. M/s L & T Ltd. and were confirmed to the extent of about ₹ 28 crores. M/s L & T Ltd. filed an appeal along with stay petition which was disposed of vide stay order No. 1746/2009 dated 11.12.2009 directing them to deposit an amount of ₹ 6 crores. Inasmuch the present demand relates to a part of the main contract provided to M/s L & T Ltd. and inasmuch as the demand in respect of the entire contract stands raised against M/s L & T Ltd., the present demand of sub-contract get included in the main appellant. By appreciating the fact, we grant waiver of pre-deposit and allow the stay petition unconditionally. - Stay granted.

Summary

Issues: Delay in COD application, pre-deposit of service tax and penalty, applicability of 'Commercial or Industrial Construction' definition, relation of sub-contractor demand to main contractor's appeal.

Delay in COD Application:
The judgment appreciates a 20-day delay in the COD application and allows it. This decision indicates the Tribunal's consideration of the timeline in procedural matters.

Pre-deposit of Service Tax and Penalty:
The prayer sought to dispense with the pre-deposit condition of service tax and penalty amounting to Rs. 1,98,397/- each under Section 76 of the Finance Act, 1994. The Tribunal, after examining the facts, grants a waiver of pre-deposit and allows the stay petition unconditionally. This highlights the Tribunal's discretion in dealing with financial obligations related to tax and penalties.

Applicability of 'Commercial or Industrial Construction' Definition:
The appellant, a sub-contractor to a main contractor for constructing a transport terminal, argued that the definition of 'Commercial or Industrial Construction' does not cover services related to transport terminals. The judgment acknowledges this argument and considers the demands raised against the main contractor, which were confirmed for a significant amount. The Tribunal links the sub-contractor's demand to the main contract, ultimately granting the waiver of pre-deposit and allowing the stay petition. This analysis emphasizes the interpretation of statutory definitions in tax matters.

Relation of Sub-contractor Demand to Main Contractor's Appeal:
The judgment delves into the relationship between the sub-contractor's demand and the main contractor's appeal. Given that the demands against the main contractor were substantial and a stay order was issued requiring a deposit, the Tribunal includes the sub-contractor's demand in the main appeal. This decision showcases the Tribunal's approach to consolidating related appeals for efficient adjudication. The present appeal is directed to be tagged with the main contractor's appeal for final hearing, streamlining the resolution process.