2014 (5) TMI 877 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Construction, Repair or Maintenance services - Held that - Demand has been confirmed against the applicant after taking into consideration the information filed by the applicant in their ST-3 Returns, claiming the benefit of Notification No. 15/04-ST Dated-10. 9.2004. It is the stand of the Revenue that the applicant had claimed abatement under the said Notification both on the construction services as well as on the Repair and Maintenance services, whereas, it is the contention of the applicant that the benefit of Notification No. 12/03-ST dated-20/06/2003 need to be applied to the construction service as well as to the Repair and Maintenance service. However, from the records we find that the applicants have never claimed the benefit of Notification No. 12/2003-ST Dated-20.6.2003 in their ST-3 Returns filed nor in their reply to their show cause notice. Prima facie, the claim against Notification No. 12/03-ST dated-20/06/2003, could not be verified by the lower authorities as it was not claimed. In these circumstances, we are of the view that the applicants have not been able to make out a case for total waiver of dues adjudged against them. Consequently, we direct the applicant to deposit 25% (Twenty Five Per cent) of the Service Tax amount within a period of eight weeks from today and report compliance on 12th of March, 2014. On deposit of the said amount, balance dues adjudged would stand waived and its recovery stayed during the pendency of the appeal. - Conditional stay granted.

Summary

Issues:
Application for waiver of pre-deposit of Service Tax and penalty under Sections 76, 77, and 78 of the Finance Act, 1994.

Analysis:
The case involved an application seeking the waiver of pre-deposit of Service Tax and penalties amounting to Rs.33,56,761/- and Rs.44.00 Lakhs, Rs.1,000/-, and Rs.35.00 Lakhs respectively under Sections 76, 77, and 78 of the Finance Act, 1994. The applicant, engaged in providing construction services, claimed that they mistakenly obtained Service Tax registration for both construction and Repair/Maintenance services. They argued that excluding the value of materials used in construction, they would not be liable for the tax. The applicant also mentioned a miscalculation in claiming benefits under certain notifications. The Revenue, on the other hand, contended that the applicant consistently claimed benefits under a specific notification, leading to the demand raised. The Revenue highlighted a letter mentioning the incorrect availment of benefits on Maintenance and Repair Services. After hearing both sides and examining the records, the Tribunal found discrepancies in the applicant's claims regarding notifications. The Tribunal noted that the applicant had not claimed benefits under a specific notification in their filings. Consequently, the Tribunal directed the applicant to deposit 25% of the Service Tax amount within eight weeks, with the balance dues waived upon compliance.

In conclusion, the judgment addressed the issues of mistaken Service Tax registration, incorrect claim of benefits under notifications, and the subsequent demand raised by the Revenue. The Tribunal emphasized the importance of accurate filings and upheld the partial waiver of dues, subject to the applicant's compliance with the deposit directive.