2009 (5) TMI 153 - AT - Service Tax

Appellant pointed out that Construction and Industrial Service came under the tax net only with effect from 10-9-2004. The appellants had been rendering this service prior to 10-9-2004 - The appellants are rendering the service of construction of raw water pond. According to the appellants, the said construction would not amount to Construction and Industrial Service - Moreover the appellants had already discharged the substantial part of demand - It is pointed out that the Cenvat credit inadvertently taken has already been reversed, hence there is no justification of denying the benefit of the Notification. No. 1/2006-S.T., dated 1-3-2006 - We are of the view that for hearing the appeal, the amount already deposited is sufficient. Hence we order waiver of pre-deposit of the balance dues demanded in the impugned order

Summary

Issues:
The issues involved in the judgment are related to the availment of Notification No. 1/2006-S.T., dated 1-3-2006, abatement of service tax, Cenvat credit availed and reversed, denial of benefit of Notification, imposition of penalties, interpretation of 'Construction and Industrial Service', payment of service tax liability, and waiver of pre-deposit.

Analysis:

1. Availment of Notification No. 1/2006-S.T.:
The appellants availed Cenvat credit and later reversed it, but the Revenue contended that they did not comply with the conditions of Notification No. 1/2006-S.T., resulting in the denial of the Notification's benefits. This issue led to the demand being raised and penalties imposed. The Tribunal considered the compliance with the Notification and the reversal of Cenvat credit to determine the justification for denying the benefit.

2. Interpretation of 'Construction and Industrial Service':
The appellants argued that the service they provided did not fall under 'Construction and Industrial Service' as it was rendered before the service was brought under the tax net. They highlighted that they had already paid a significant amount of service tax liability and reversed the Cenvat credit as per judicial decisions. The Tribunal evaluated whether the construction service provided by the appellants indeed fell under the category of 'Construction and Industrial Service'.

3. Waiver of Pre-deposit:
After careful consideration, the Tribunal observed that a substantial part of the demanded amount had already been paid by availing the abatement provided in the Notification. Considering this, the Tribunal ordered the waiver of pre-deposit for the remaining dues mentioned in the impugned order. The Tribunal granted a stay on the recovery of the outstanding amount until the appeal was disposed of, acknowledging the significant sum involved in the case.

4. Listing for Hearing:
Upon the advocate's request due to the substantial amount at stake, the Tribunal scheduled the appeal for hearing on a specific date to address the matter further. The decision to list the appeal for a hearing indicated the Tribunal's recognition of the complexity and importance of the case, ensuring a thorough examination of the issues involved.

In conclusion, the judgment addressed various facets concerning the availment of tax benefits, compliance with notifications, interpretation of service categories, payment of tax liabilities, and the procedural aspect of pre-deposit waiver and appeal scheduling, providing a comprehensive analysis to resolve the issues at hand effectively.