2013 (10) TMI 301 - AT - Service Tax

Valuation - Construction of commercial and residential complexes - stay - Held that - Since the matter has been consideredby the Tribunal in two appeals and this Tribunal has taken a view that when abatement is claimed, it should be from value inclusive of all the materials used for providing the service. In the case of invoking extended period, we primafacie accept the contention of the counsel of the applicant. Considering the various aspects, we find it proper to call for a reasonable pre-deposit at this stage. - stay granted partly.

Summary

Issues:
1. Abatement under notifications 15/04-ST and 1/06-ST for construction projects.
2. Inclusion of value of materials supplied by customers in taxable value.
3. Time-barred demand due to invoking extended period of limitation.
4. Pre-deposit requirement for appeal admission.

Abatement under notifications 15/04-ST and 1/06-ST for construction projects:
The applicant, engaged in construction, received steel and cement from customers, claiming abatement under notifications 15/04-ST and 1/06-ST, paying service tax on 33% of consideration. Revenue contended abatement applies only if entire materials' value is included in gross amount. Show cause notices were issued for two periods, confirming amounts with interest and penalties. Applicant argued materials from customers should not be part of consideration, citing a Madras High Court case. Revenue referenced a Calcutta High Court decision and Tribunal rulings, emphasizing materials' value must be included, rejecting applicant's interpretation.

Inclusion of value of materials supplied by customers in taxable value:
Applicant's counsel argued materials from customers should not be considered in taxable value, citing a Madras High Court case and challenging the extended period of limitation for the first demand. Revenue opposed, citing a Calcutta High Court decision and Tribunal rulings that all materials' value must be included, rejecting applicant's interpretation. Tribunal noted previous decisions and directed a pre-deposit for appeal admission, considering the matter's complexity.

Time-barred demand due to invoking extended period of limitation:
Applicant contended the first demand was time-barred due to invoking the extended period of limitation. Counsel referenced a Madras High Court case and requested appeal admission without pre-deposit. Revenue opposed, citing Tribunal rulings and previous decisions, emphasizing the need for a pre-deposit. Tribunal accepted the contention regarding the extended period, directing a reasonable pre-deposit for appeal admission.

Pre-deposit requirement for appeal admission:
After considering arguments, Tribunal directed the applicant to make a pre-deposit of Rs.1,50,000 for appeal admission, with a stay on collection of balance dues during the appeal's pendency. The decision was based on Tribunal's previous rulings and the need for a pre-deposit in complex cases. The Tribunal balanced the interests of both parties by requiring a pre-deposit while waiving the balance dues' pre-deposit during the appeal process.