2012 (10) TMI 556 - AT - Service Tax

Waiver of the pre-deposit construction of residential construction sub contractor Held that - Period involved in this case is of 2005-2006, 2007-2008 wherein, undisputedly the appellant has been considered as the sub contractor - Prior to 23-8-2007, there was a Board s circular which indicated that the sub contractors need not discharge service tax liability if the main contractor is discharging the Service tax liability - subsequent to 23-8-2007, though the circular may be pressed into service for the purpose of demand of the Service tax, issue is a contentious one - show cause notice as well as both the orders have not given bifurcation of the amount of the Service tax liability that amount arises on the appellant after 23-8-2007 and also there is a question of limitation waiver of pre-deposit allowed

Summary

Issues:
1. Stay petition for waiver of pre-deposit of a specific amount, interest, and penalty.
2. Confirmation of the amount by lower authorities due to services provided as a sub contractor for residential construction.
3. Interpretation of Board's circulars regarding Service tax liability for sub contractors before and after 23-8-2007.
4. Lack of bifurcation of Service tax liability post 23-8-2007 and question of limitation in the orders.

Analysis:
The case involved a stay petition seeking the waiver of pre-deposit of a certain amount, interest, and penalty. The lower authorities confirmed the amount owed based on the appellant providing services as a sub contractor for residential construction. The appellant argued that prior to 23-8-2007, a Board's circular exempted sub contractors from discharging Service tax liability if the main contractor did so. However, post that date, a new circular required sub contractors to fulfill the Service tax liability. The lack of bifurcation of the Service tax liability post 23-8-2007 and the issue of limitation were highlighted. The Tribunal noted the contentious nature of the issue and the appellant's prima facie case for the waiver of pre-deposit. Consequently, the application for the waiver was allowed, and recovery was stayed pending the appeal's disposal. The Tribunal emphasized the need for a clear breakdown of the Service tax liability post 23-8-2007 and the limitation aspect in future proceedings.