2014 (1) TMI 1200 - AT - Service Tax

Waiver of pre-deposit of tax - Site formation and clearance service - Held that - Articles of Association of the applicant-company would indicate that the applicant-company had taken over the entire assets and liability which cover the present duty liability. There is no need to go through the decision as cited by the learned CA. On the other issue, we find that the definition of site formation and clearance, excavation and earth moving and demolition would include drilling, boring and core extraction services for construction, geophysical, geological or similar purposes. It is seen that the applicant under took the activities of blast hole drilling amongst others. Apparently, it would cover the definition of site formation service - Conditional stay granted.

Issues:
1. Waiver of pre-deposit of tax along with interest and penalty for the period 16.6.2005 to 27.6.2005 under the category of 'site formation and clearance service'.
2. Whether the tax liability should be imposed on the present applicant or the previous proprietor.
3. Classification of the activities undertaken by the applicant as either mining service or 'site formation and clearance, excavation and earth moving and demolition service'.

Analysis:

Issue 1: Waiver of pre-deposit of tax
The applicant sought waiver of pre-deposit of tax amounting to Rs.8,31,974/- along with interest and penalty for a specific period. The learned counsel for the appellant argued that the tax liability should not be imposed on the present applicant, citing the case law of CCE, Bangalore-I vs. Press Fab Precision Components Pvt. Ltd. The appellant also contended that the activities undertaken fall under mining service, which was introduced after the relevant period. The Revenue, on the other hand, argued that the liability should be on the present applicant based on the Articles of Association of the company. The Tribunal observed that the applicant had taken over the assets and liability of the unit, thus covering the tax liability. The Tribunal also noted that the activities, including blast hole drilling, undertaken by the applicant fall under the definition of 'site formation service'.

Issue 2: Tax liability on the present applicant
The Tribunal, after considering the arguments from both sides and examining the Articles of Association of the applicant's company, concluded that the liability of tax should indeed be on the present applicant as they had taken over the assets and liability of the unit. This decision was based on the understanding that the applicant had acquired the entire responsibility, including tax liability, from the previous proprietor.

Issue 3: Classification of activities
Regarding the classification of activities as either mining service or 'site formation and clearance, excavation and earth moving and demolition service', the Tribunal found that the activities, such as blast hole drilling, undertaken by the applicant align with the definition of 'site formation service'. The Tribunal acknowledged the argument presented by the appellant that the activities could be classified as mining service and decided to further examine this aspect during the appeal hearing.

In conclusion, the Tribunal directed the applicant to deposit a specific sum within a stipulated time frame, with the waiver of pre-deposit of the balance tax amount along with interest until the appeal is disposed of. This comprehensive analysis of the issues involved in the judgment highlights the key arguments, legal precedents cited, and the Tribunal's findings, providing a detailed understanding of the case.

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