2014 (2) TMI 666 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Industrial or commercial construction service - Held that - For an activity to be classified as industrial or commercial service , it should be shown that it was performed to construct a complex meant primarily for commercial/industrial use. The food grain godowns constructed by the appellant for FCI, prima facie, cannot be considered to be meant primarily for commercial use - appellant has made out prima facie case against the entire demand - Stay granted.

Summary

Issues:
1. Waiver and stay sought by the appellant in relation to service tax and education cesses under 'industrial or commercial construction service' and 'construction of residential complex service'.

Analysis:
The appellant filed an application seeking waiver and stay concerning the adjudged dues, including a demand of Rs.41,63,108/- for service tax and education cesses under two categories: 'industrial or commercial construction service' and 'construction of residential complex service'. The appellant provided the former service to the Food Corporation of India (FCI) and the latter to the Andhra Pradesh State Housing Corporation. After examining the records and hearing both parties, the tribunal found that the appellant established a prima facie case regarding the demand under 'construction of residential complex service'. This finding was supported by previous stay orders issued by the bench in similar cases. However, regarding the demand under 'industrial or commercial construction service', the appellant argued that the service provided to FCI, a non-commercial entity, did not fall under this category. The appellant referenced Wikipedia to support this claim. On the other hand, the Superintendent (AR) cited a previous stay order rejecting a similar argument related to constructions for entities like BSNL. The tribunal noted that for an activity to be classified as 'industrial or commercial service', it must be shown that it was performed to construct a complex primarily for commercial/industrial use. The tribunal concluded that the food grain godowns constructed by the appellant for FCI did not qualify as primarily for commercial use, a fact not presented in the case referenced by the Superintendent (AR).

The tribunal held that the appellant successfully established a prima facie case against the entire demand. Consequently, the tribunal granted the waiver and stay as requested by the appellant.