2013 (6) TMI 648 - AT - Service Tax

Commercial and industrial construction services - non-remittance of service tax - stay - Held that - On a prima facie, creative but unsustainable interpretation, the adjudicating authority found that the service provided by the petitioner pertained to construction of a dam which was an integral component of a hydro Electric project and is therefore outside the purview of the exclusion clause of Section 65(25)(b) which, excludes services provided in respect of roads, airports, railways, transport, terminals, bridges, tunnels and dams from the charge of service tax. Prima facie, we are of the view that the petitioner is immune to the liability of service tax in respect of provision of services in relation to construction of a dam, which is admittedly the service provided by the petitioner. - stay granted. In respect of other transactions on which service tax has been levied viz. renting of immovable property service and supply of tangible goods service, we are not inclined prima facie, to grant any relief at this stage. - stay grated partly.

Summary

Issues:
1. Recall of stay application order dated 21.2.2013
2. Appeal against adjudication order dated 28.9.2012 for service tax assessment

Recall of Stay Application Order:
The judgment addresses the Misc. Application No. 56853/2010 seeking the recall of the order dated 21.2.2013, which dismissed the stay application No. 5319/2012 for default. The petitioner claimed they received no notice of the listing of the stay application, thus asserting no default occurred on 21.2.2013. As there was no rebuttal to this claim, the order dismissing the stay application was recalled, and the stay application was restored.

Appeal Against Adjudication Order:
The appeal pertains to the adjudication order dated 28.9.2012, where the petitioner was assessed for service tax, cesses, interest, and penalties. The proceedings were initiated due to alleged failure to remit service tax for various chargeable services provided, primarily related to non-remittance of service tax on commercial and industrial construction services. The adjudicating authority, based on a creative but unsustainable interpretation, found the service provided by the petitioner in relation to the construction of a dam as outside the exclusion clause of Section 65(25)(b) of the service tax law. The Tribunal, however, opined that the petitioner should be immune to the liability of service tax concerning the construction of a dam. Regarding other transactions like renting of immovable property service and supply of tangible goods service, the Tribunal was not inclined to grant relief at that stage. The admitted service tax component for renting of immovable property service and supply of tangible goods service amounted to around Rs.1.50 lakhs. Consequently, the Tribunal granted a waiver of pre-deposit and a stay of further proceedings on the condition that the petitioner deposits Rs.1.5 lakhs within four weeks and reports compliance by 28th May 2013. Failure to meet these conditions would result in the appeal being rejected for default. The Tribunal ensured that the petitioner was duly notified of its obligations under this order.

This detailed analysis covers the issues of recalling the stay application order and the appeal against the adjudication order comprehensively, outlining the Tribunal's findings and decisions in each matter.