2014 (5) TMI 613 - AT - Service Tax

Waiver of pre deposit - Construction Service - Held that - prima facie case for the appellant inasmuch as it is not in dispute that the houses constructed by the Tamil Nadu Policy Housing Corporation Ltd., are owned by the State Government and were allotted to police personnel by the Department. The Police Housing Corporation appeared to have worked as an extended arm of the Government. Some of the decisions cited by the learned Counsel are apparently supportive of his point that the houses that were constructed should be considered to be in a personal use of the State Government - Following decision of S.Kadrivel Vs CST, Tiruchirapalli 2013 (8) TMI 262 - CESTAT CHENNAI - Stay granted.

Summary

Issues: Application for waiver of pre-deposit of tax of Rs.31,31,211/- along with interest and penalty for the period 2005-06 to 2009-10.

The judgment addressed the issue of waiver of pre-deposit of tax, interest, and penalty for the applicant related to construction services provided to Tamil Nadu Police Housing Corporation Ltd. The applicant contended that the services were provided to a government-owned entity and should be considered for waiver based on previous tribunal decisions. The Authorized Representative argued that the services were rendered to a separate legal entity, TNPHCL, and the flats were occupied by Tamil Nadu police, not for personal use as defined in the Finance Act. The Tribunal examined the records and noted that the applicant constructed buildings for TNPHCL, a government-owned company, which were later handed over to the Government of Tamil Nadu. Referring to past decisions, including the case of Bismi Engineering Contractors, where unconditional stay was granted, the Tribunal found merit in the applicant's case. The Tribunal granted waiver of pre-deposit of dues arising from the impugned orders, citing the decision in Bismi Engineering Contractors, and imposed a stay on the collection of dues during the appeal process. The Tribunal emphasized the importance of considering the nature of use of the constructed buildings and granted the waiver based on the precedents and circumstances of the case.

In conclusion, the judgment by the Appellate Tribunal CESTAT Chennai granted the applicant's request for waiver of pre-deposit of tax, interest, and penalty related to construction services provided to Tamil Nadu Police Housing Corporation Ltd. The decision was based on the applicant's construction work for a government-owned entity, the nature of use of the buildings, and precedents set by previous tribunal decisions, including the case of Bismi Engineering Contractors. The Tribunal highlighted the significance of the relationship between the entity receiving the services and the government, ultimately leading to the grant of the waiver and imposition of a stay on the collection of dues during the appeal process.