2012 (6) TMI 164 - AT - Service Tax

Prayer in the application is to dispense with the pre-deposit of Service tax - Commercial and Industrial Construction Services and Maintenance and Repair Services - It was seen that during the course of audit that the appellants have provided services of construction of pipe lines running within the industrial and commercial establishment, during the period 10-9-2004 to 15-6-2005. However, they have not paid any Service tax on the same Held that - CBEC, vide its Circular No. 79/9/2004-S.T., dated 17-9-2004 has clarified that any pipe line other than those running within an industrial and commercial establishments such as factory, refinery and similar industrial establishments are long distance pipe lines. Thus, construction of pipelines running within such an industrial and commercial establishment is within the scope of services levy of Service tax with effect from 10-9-2004, appellants have not pleaded any financial hardship, applicant/appellants directed to deposit an amount of Rs. 35 Lakhs

Summary

Issues:
- Pre-deposit of Service tax
- Appellant's engagement in taxable services
- Definition of construction services
- Circular No. 79/9/2004-S.T.
- Commissioner (Appeals) order
- Financial hardship plea

Pre-deposit of Service tax:
The judgment revolves around the appellant's request to dispense with the pre-deposit of Service tax amounting to Rs. 94,23,337/-, Rs. 17,99,016/-, and Rs. 5,20,155/-, along with interest and penalties confirmed against them. The tribunal directed the appellant to deposit Rs. 35 Lakhs as a condition for hearing their appeal within 12 weeks from the date of the judgment.

Appellant's engagement in taxable services:
The appellant was found to be providing taxable services under categories such as "Commercial and Industrial Construction Services," "Maintenance and Repair Services," and other services like Erection, Commissioning, and Installation Services. The audit revealed that the appellant had undertaken construction of pipelines within industrial and commercial establishments during a specific period without paying the required Service tax, leading to the initiation of proceedings against them.

Definition of construction services and Circular No. 79/9/2004-S.T.:
The adjudicating authority considered the definition of construction services, which initially did not cover laying down long-distance pipelines. However, a circular issued by the Central Board of Excise and Customs clarified that construction of pipelines within industrial and commercial establishments falls under the scope of services liable for Service tax from a certain date. This clarification played a crucial role in the assessment of the appellant's liability.

Commissioner (Appeals) order:
The Commissioner (Appeals) based their decision on the definition of Commercial and Industrial Construction Services and the clarification provided by the Board. The tribunal noted that the appellant failed to establish a strong prima facie case in their favor to allow the stay petition unconditionally. Additionally, the appellant did not cite any financial hardship in their plea.

Financial hardship plea:
The tribunal highlighted that the appellant did not demonstrate any financial hardship in their case. Considering the overall facts and circumstances, the tribunal directed the appellant to deposit Rs. 35 Lakhs within a specified timeframe as a prerequisite for the hearing of their appeal.

This comprehensive analysis of the judgment addresses the issues raised and the key legal aspects considered by the Appellate Tribunal CESTAT, Ahmedabad in the case.