2014 (2) TMI 757 - AT - Service Tax

Waiver of pre-deposit - Commercial and industrial service - construction of schools, hostels, hospitals - Held that - some of the works executed by the petitioner during the period such as towards house construction or repairs of residential flats may perhaps fall outside the scope of CICS. - petitioner failed to discharge its obligations as an assessee by responding truly and fairly to the show cause notice by filing adequate pleadings supported by the evidentiary material, indicating and supporting its claim for exclusion from the liability to service tax for having provided CICS. - say granted partly.

Summary

Issues: Stay of proceedings post adjudication order, Tax liability for commercial or industrial construction services, Lack of pleadings in defense, Exclusion from service tax liability, Pre-deposit waiver and stay conditions.

Stay of Proceedings Post Adjudication Order:
The judgment revolves around a stay application seeking relief from the proceedings following an adjudication order issued by the Commissioner, Central Excise, Jaipur-II. The Tribunal had previously remanded the case for fresh determination. The petitioner, registered for commercial or industrial construction services, faced a service tax demand of Rs. 1,12,52,635/- along with interest and penalties under relevant sections. Despite the petitioner's appeal and deposit of Rs. 40,00,000/- as directed, the defense presented lacked essential pleadings and failed to address the nature of services provided or the taxable status of each service.

Tax Liability for Commercial or Industrial Construction Services:
The petitioner contended that not all services provided were taxable under commercial or industrial construction services. They argued that certain activities, such as construction for schools, hostels, and hospitals, did not fall within the scope of commercial or industrial construction. The Tribunal noted the absence of clear assertions or pleadings supporting the exclusion of certain works from the service tax liability, emphasizing the petitioner's failure to respond adequately to the show cause notice.

Lack of Pleadings in Defense:
The Adjudicating Authority received a defense from the petitioner that lacked essential pleadings and failed to provide a clear response to the show cause notice. The defense did not address the nature of services provided or specify which services were taxable, leading to ambiguity regarding the taxable status of the works executed during the relevant period.

Exclusion from Service Tax Liability:
The petitioner argued that certain works, such as house construction or repairs of residential flats, might fall outside the scope of commercial or industrial construction services. However, the Tribunal highlighted the petitioner's failure to substantiate these claims with adequate pleadings or evidentiary material, thereby casting doubt on the validity of the exclusion from service tax liability.

Pre-deposit Waiver and Stay Conditions:
Despite the petitioner's shortcomings in presenting a robust defense, the Tribunal granted a waiver of pre-deposit and stayed further proceedings for the realization of the adjudicated liability. However, this waiver was subject to the condition that the petitioner remit Rs. 55,00,000/- plus interest within four weeks. Failure to comply would result in the rejection of the appeal for non-payment. The Tribunal emphasized the importance of fulfilling obligations as an assessee and providing sufficient evidence to support claims for exclusion from service tax liability.

In conclusion, the judgment underscores the significance of presenting a comprehensive defense supported by pleadings and evidentiary material in tax liability cases. Despite granting a pre-deposit waiver, the Tribunal emphasized the need for clarity and substantiation in defense arguments to justify exclusion from service tax liability.