2016 (5) TMI 1054 - HC - Service Tax

Waiver of pre-deposit - Demand of Service tax - Construction Service - contravention of the Circular dated 24th August, 2010 issued by CBEC clarifying that the activity had to be treated as a works contract - Issue pointed out of the exigibility of the works contract executed by the Petitioner to service tax by wrongly classifying it as construction service , has not been taken note of by the CESTAT - Held that - in a similar appeal before this Court by an entity of the Appellant Group, this Court by an order reported in 2015 (10) TMI 2484 - DELHI HIGH COURT noted a similar contention 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. Therefore, in view of the fact that the above contentions have not been considered by the CESTAT when it passed the impugned order, the impugned order is set aside and revives the stay application before the CESTAT for a fresh decision in accordance with law. - Appeal disposed of

Summary

Issues:
1. Appeal against order of Customs, Excise & Service Tax Appellate Tribunal for pre-deposit.
2. Non-consideration of jurisdictional issue by CESTAT.
3. Distinction between value of goods and services for service tax.
4. Remand of similar appeal by High Court.
5. Setting aside impugned order and revival of stay application.

Analysis:
1. The judgment pertains to an appeal filed by the Ahluwalia Construction Group against an order passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) requiring a pre-deposit of Rs. 1.75 crores by a specified date. The Appellant challenged this order through the High Court.

2. The Appellant contended that the CESTAT failed to consider crucial jurisdictional issues, specifically related to the demand under the head 'construction service' being in contravention of a circular issued by the Central Board of Excise and Customs. The Appellant argued that the works contract should have been treated as such, not as a 'construction service'. Additionally, the Appellant highlighted the need to differentiate between the value of goods and services for service tax purposes, citing a Supreme Court judgment for support.

3. The High Court noted a similar contention in a previous appeal by an entity of the Appellant Group, where the Court remanded the matter to CESTAT for reconsideration of the waiver application for pre-deposit. This indicates a consistent approach by the High Court in addressing such issues.

4. Due to the failure of CESTAT to consider the important contentions raised by the Appellant, the High Court set aside the impugned order dated 9th November 2015. The Court also revived the stay application filed by the Appellant before CESTAT, directing a fresh decision in accordance with the law.

5. Consequently, the appeal and the pending application were disposed of based on the High Court's decision to set aside the CESTAT order and allow for a fresh consideration of the matter in light of the jurisdictional and legal issues raised by the Appellant.