2014 (1) TMI 1148 - AT - Service Tax

Waiver of pre deposit - Held that - Present case is appreciation of evidence relating to supply of bought out items against the work orders issued by their clients. The Applicant s claim that they had supplied the materials, but due to reflection of the material-value along with the services provided in the balance sheet, the confusion has been created. In these circumstances, the offer made by the ld. Advocate to deposit Rs.33.00 lakh is accepted. The Department is at liberty to verify the payment particulars of Rs.17,62,909/-. Consequently, the Applicant are directed to make the predeposit of Rs.33.00 lakh in addition to Rs.17,62,909/- already deposited, within a period of 8 weeks and report compliance on 29.05.2013. On deposit of the said amount, the balance amount of dues adjudged would stand waived and its recovery stayed during pendency of the Appeal - Decided against assessee.

Summary

Issues:
Waiver of predeposit of Service Tax under Section 75 of the Finance Act, 1994; Applicability of service tax on work orders involving supply of materials; Verification of payment particulars; Direction for predeposit amount and compliance deadline.

Analysis:
The judgment pertains to an Application for waiver of predeposit of Service Tax amounting to Rs.2,28,46,116.00 along with interest and penalties under relevant sections of the Finance Act, 1994. The Appellant had provided erection, commissioning, or installation services to clients, including M/s. Durgapur Steel Plant under DSP Project from 2004-05 to 2008-09. The Appellant contended that the Adjudicating Authority did not consider the supply of materials, which were bought-out items sold to clients. The Appellant argued that the work orders constituted a 'work contract' involving both material supply and service execution, and service tax liability should only apply post-01.06.2007. The Appellant had already made a payment of Rs.17,62,909.00, which was reported during adjudication, and offered to make an additional predeposit of Rs.33.00 lakh. The Revenue, however, disputed the appropriation of the earlier payment.

The Tribunal considered the evidence regarding the supply of bought-out items against work orders. The confusion arose due to the reflection of material value along with services in the balance sheet. Accepting the Appellant's offer, the Tribunal directed a predeposit of Rs.33.00 lakh in addition to the already deposited amount within 8 weeks, with compliance due by 29.05.2013. Upon depositing the specified amount, the balance dues would be waived, and recovery stayed during the Appeal's pendency. The Department was granted liberty to verify the payment particulars of Rs.17,62,909.00 to ensure compliance.

In conclusion, the judgment addressed the waiver of predeposit of Service Tax, the interpretation of work orders involving material supply, the need for additional predeposit, and the compliance deadline. The decision balanced the Appellant's submissions with the Revenue's contentions, providing a clear directive for payment and verification, ensuring fairness and procedural adherence in the adjudication process.