2008 (8) TMI 295 - AT - Service Tax

Appellants have been charged for having rendered services which is not part of composite contract. There are several headings under which tax has been charged appellant submits that there are several headings which do not come within the ambit of Consulting Engineer . It is the submission that they have come under Works Contract from 1-6-2007 and hence, the service tax is not leviable for the period 1999 to 2004 - There is, prima facie, merit in the appellant s submissions. The appellant is a PSU unit stay granted partly

Summary

Issues:
1. Liability to pre-deposit service tax amount and penalties under various Sections of the Act.
2. Whether the service tax is chargeable under the category of "Consulting Engineer" for the period 1999 to 2004.

Analysis:
1. The appellant, a PSU unit, was required to pre-deposit a service tax amount and penalties. They had already deposited a partial amount. The issue revolved around the charge of rendering services not part of a composite contract. The appellant contended that certain headings under which tax was charged were not applicable under the category of "Consulting Engineer."

2. After hearing both sides, the Counsel argued that certain headings did not fall under "Consulting Engineer" and should be considered as "Works Contract" from 1-6-2007, making the service tax not leviable for the period 1999 to 2004. The SDR, however, maintained that the authorities had correctly charged service tax under various headings.

3. The Tribunal carefully considered the submissions and found merit in the appellant's argument that some headings were not chargeable under "Consulting Engineer." Given the substantial amount already pre-deposited by the PSU unit, the Tribunal granted a waiver of the balance duty and penalty amounts, staying their recovery until the appeal's disposal. The appeal was scheduled for a hearing on 19th November 2008, considering the significant amount involved.

This judgment highlights the importance of correctly categorizing services for tax purposes and the Tribunal's discretion in granting waivers based on prima facie merits of the case.