2008 (8) TMI 36 - AT - Service Tax

Applicant has constructed Diaphragm wall and anchor slab with special fill on the banks of the river Sabarmati - allegations in SCN are that he has provided services of Site Formation & Clearance, Excavation & Earthmoving Demolition Services without getting themselves registered applicant is relying upon the exclusion clause under the definition - Whether impugned services would get covered under the exclusion clause or not - issue is a arguable one stay not granted completely

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax and penalty.
2. Allegations of providing services without registration and payment of service tax.
3. Confirmation of demand, penalty, and interest by adjudicating authority.
4. Interpretation of services provided under the exclusion clause.
5. Decision on the waiver of pre-deposit amount.

Issue 1: Stay petition for waiver of pre-deposit of service tax and penalty
The applicant filed a stay petition seeking a waiver of pre-deposit of service tax and penalty imposed for not discharging the service tax liability. The applicant had constructed "Diaphragm wall and anchor slab" on the banks of the river Sabarmati under a contract from Sabarmati River Front Development Corporation Ltd. The authorities issued a show-cause notice demanding service tax, interest, and penalties, which the applicant contested, leading to the present stay petition.

Issue 2: Allegations of providing services without registration and payment of service tax
The allegations against the applicant were that they provided services without registering with the appropriate revenue authority and without paying service tax. The show-cause notice demanded recovery of a substantial amount of service tax, interest, and penalties, citing the extended period of five years for recovery under the Finance Act, 1994.

Issue 3: Confirmation of demand, penalty, and interest by adjudicating authority
After considering the submissions made by the applicant, the adjudicating authority confirmed the demand for service tax, imposed penalties, and directed payment of interest on the confirmed demand. This confirmation led to the filing of the stay petition by the applicant seeking a waiver of pre-deposit of the amount involved in the case.

Issue 4: Interpretation of services provided under the exclusion clause
The applicant argued that the services provided, namely the construction of diaphragm wall and anchor slab, should fall under an exclusion clause in the definition of services. The exclusion clause exempts services related to agriculture, irrigation, watershed development, and renovating or restoring water sources or bodies. The interpretation of whether the applicant's activities fall under this exclusion clause required further examination.

Issue 5: Decision on the waiver of pre-deposit amount
After considering the submissions from both sides and examining the records, the Tribunal found that the applicant did not establish a prima facie case for a complete waiver of the confirmed service tax amount. The Tribunal directed the applicant to deposit a specified amount within a given timeframe and waived the pre-deposit condition for the balance amount pending the appeal's disposal.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision regarding the waiver of pre-deposit of service tax and penalties.