2016 (5) TMI 681 - HC - Service Tax

Waiver of pre-deposit - Tribunal passed order by setting aside only two contentions of appellant - Service tax demanded under the head Construction service was in contravention of circular dated 24th August, 2010 issued by CBEC clarifying that the activity had to be treated as a works contract and a distinction had to be drawn between the value of goods supplied as part of the works contract and the value of the services rendered for the purposes of Service Tax - Held that - the Court notices that in a similar appeal before this Court by a sister concern of the Appellant reported in 2015 (10) TMI 2484 - DELHI HIGH COURT noted a similar contention of the Appellant and remanded the matter to the CESTAT for consideration of the Appellant s application for waiver of the pre-deposit afresh in accordance with law. In view of the fact that the above contentions have not been considered by the CESTAT when it passed the impugned order, the Court sets aside the impugned order and revives the stay application filed by the Appellant before the CESTAT for a fresh decision in accordance with law. - Appeal disposed of

Summary

Issues:
1. Appeal against order requiring pre-deposit by Customs, Excise & Service Tax Appellate Tribunal (CESTAT).
2. Jurisdictional issue of service tax demand for works contract.
3. Distinction between value of goods and services in works contract for Service Tax.
4. Consideration of contentions not addressed by CESTAT in the impugned order.
5. Setting aside the impugned order and reviving stay application for fresh decision.

Analysis:
1. The appellant filed an appeal against the CESTAT's order mandating a pre-deposit of Rs. 1.75 crores by a specified date. The appellant challenged the order, highlighting key contentions that were not adequately addressed by the CESTAT in the impugned order.

2. The appellant argued that the demand for service tax on a works contract post-2007 was in contravention of a circular by the Central Board of Excise and Customs, which classified the activity as a works contract, not a construction service. This jurisdictional issue was crucial and had not been acknowledged by the CESTAT in its decision.

3. Additionally, the appellant raised a point regarding the Supreme Court judgment distinguishing between the value of goods and services in a works contract for the purpose of Service Tax. This contention was not considered by the CESTAT, further underscoring the inadequacy of the impugned order.

4. Notably, a similar appeal by a sister concern of the appellant had been remanded by the Court for reconsideration of the waiver of pre-deposit application. Given the failure to address critical contentions, the High Court set aside the impugned order and reinstated the appellant's stay application for a fresh decision in compliance with the law.

5. Consequently, the appeal and the pending application were disposed of in light of the Court's decision to overturn the CESTAT's order and allow for a reevaluation of the appellant's case. This comprehensive analysis showcases the meticulous scrutiny of the legal issues and the subsequent judicial intervention to ensure fairness and adherence to legal principles.