2014 (5) TMI 536 - AT - Service Tax

Waiver of pre-deposit of Service Tax - CENVAT Credit - Revenue disputes the said fact alleging that they have not rendered civil construction services, but rendered only installation and commissioning services for which they have availed CENVAT Credit on the inputs - benefit of Notification No.15/2004 and 1/2006-ST dated 01.03.2006 - Held that - Prima facie, we find that the conclusion of the ld.adjudicating authority rests on a letter issued by M/s.NTPC dated 23.11.2011. We also find that after completion of the adjudication proceeding, the Appellants had also obtained a letter from M/s.NTPC, whereby, it is clarified that the services rendered by the Appellant to them against the contract dated 29.03.2004, comprises of both installation services as well as construction services - deduction on account of advances claimed by the Appellant also needs to be scrutinized. At this stage, the offer made by the Ld.Sr.Advocate for the Appellant seems to be reasonable, consequently, we direct the Appellant to deposit Rs.20.00 Lakhs within a period of eight weeks from today and report compliance directly to the Ld.Commissioner. The Ld.Commissioner after recording compliance would proceed with the adjudication afresh taking into consideration the evidences on record and also the evidences that may be placed by both sides - Matter remanded back to commissioner (appeals) after granting stay partly.

Summary

Issues:
Application seeking waiver of pre-deposit of Service Tax and penalties under Sections 78 and 76 of Finance Act, 1994. Dispute over admissibility of abatement from gross taxable value for services rendered. Contradictory letters from M/s.NTPC regarding services provided. Verification of deductions claimed by the Appellant.

Analysis:
The judgment revolves around the Appellant's request for waiver of pre-deposit of Service Tax and penalties. The central issue pertains to the admissibility of abatement from the gross taxable value for services rendered to M/s.NTPC. The Appellant claimed to have provided both 'installation & commissioning' and 'civil construction services' based on a contract dated 29.03.2004. They availed CENVAT Credit on inputs for installation services and claimed abatement for civil construction services. However, the Revenue contended that only installation and commissioning services were provided, denying the applicability of abatement under relevant Notifications. The dispute stemmed from conflicting letters from M/s.NTPC, with one stating services included both installation and construction, while another suggested otherwise.

The judgment highlighted the need for verification and scrutiny by the adjudicating authority due to the contradictory letters and the claim of deductions on advances by the Appellant. The Tribunal acknowledged the validity of the Revenue's concerns regarding the need for further examination of the evidence. Consequently, the Tribunal directed the Appellant to deposit Rs.20.00 Lakhs within eight weeks and instructed the Ld.Commissioner to conduct a fresh adjudication considering all evidence on record and any additional evidence presented by both parties. The Appellant was granted a reasonable opportunity for a hearing, and all issues were left open for further consideration. The judgment allowed the appeal by remanding the matter for a comprehensive review.

In conclusion, the judgment emphasized the importance of verifying conflicting evidence, scrutinizing claimed deductions, and ensuring a fair adjudication process. The decision to remand the case for further examination underscored the Tribunal's commitment to a thorough and just resolution of the dispute.