2007 (12) TMI 143 - AT - Service Tax

Prayer for extension of time of interim stay order since matter has been referred to Larger Bench by the Mumbai Bench after grant of interim stay order; stay application cannot be heard - prayer is justified - by this Miscellaneous Order Revenue is restrained from recovering, till such time the stay application is heard

Summary

Issues:
1. Waiver of pre-deposit and penalty
2. Bifurcation of composite contract
3. Reference to Larger Bench

Analysis:
1. The appellants sought waiver of pre-deposit and penalty amounts. The issue revolved around the classification of a composite contract as either turnkey or consultancy. The Tribunal had previously ruled in favor of the party citing the case of Daelim Industrial Co. Ltd. v. CCE, Vadodara. However, conflicting judgments existed, leading the Mumbai Bench to refer the matter to a Larger Bench. The Commissioner sought an extension to file comments, and the counsel requested the interim order to be continued until the Larger Bench decision.

2. The counsel justified the need for the interim order to prevent Revenue recovery pending the Larger Bench decision. The Tribunal agreed, noting that the stay application could not proceed due to the matter being referred to the Larger Bench. Thus, a Miscellaneous Order was issued to restrain Revenue from recovery until the stay application was heard, scheduled for 12th March 2008.

3. The judgment highlighted the complexity arising from conflicting decisions on the classification of composite contracts. The reference to the Larger Bench indicated the significance of the issue and the need for a unified interpretation. The Tribunal's decision to maintain the interim order reflected a balance between the parties' interests pending the resolution of the legal uncertainty. The case exemplified the challenges in tax law interpretation and the importance of judicial clarity in resolving such disputes.