2014 (9) TMI 304 - AT - Service Tax

Small scale exemption upto limit of ₹ 10 lakhs - determination of eligibility - availing Notification no. 6/2005-ST dated 01.03.2005 while availing benefit of Notification 1/2006-ST granting abatement in value - Held that - if the benefit of the Notification 1/2006-ST is not considered while computing the exemption and eligibility limits under Notification 6/2005-ST, it would certainly result in taking away the benefit granted under Notification 6/2005. Further, this Tribunal in the case of Surinder Kumar Mittal 2012 (8) TMI 244 - CESTAT, NEW DELHI has taken a view that both Notifications can be simultaneously availed. - appellant has made out a case for grant of stay. - stay granted.

Summary

Issues: Interpretation of Notification no. 6/2005-ST and Notification no. 1/2006-ST for service tax exemption eligibility.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI involved an appeal and stay petition against an Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax. The impugned order confirmed a service tax demand, interest, and penalties under the Finance Act, 1994. The appellant contended that the authorities erred in interpreting Notification no. 6/2005-ST and Notification no. 1/2006-ST. The appellant argued that for construction services, abatement of 67% was applicable, and tax had to be paid on 33% of the value of services rendered. By considering the abated value, the turnover of the appellant did not exceed the limit of &8377; 10 lakhs, making them eligible for the small scale exemption under Notification no. 6/2005-ST. The appellant also cited a Tribunal decision supporting the simultaneous consideration of both Notifications for exemption eligibility.

The Revenue, represented by the Superintendent, disagreed, stating that the Notifications should not be clubbed together, and only the gross value of consideration received should be the basis for granting the benefit of Notification no. 6/2005-ST. After considering the arguments from both sides, the Tribunal observed that not considering the benefit of Notification no. 1/2006-ST while computing the exemption and eligibility limits under Notification no. 6/2005-ST would result in depriving the benefit granted under the latter Notification. Citing the Tribunal's decision in a similar case, the Tribunal held that both Notifications could be simultaneously availed. Consequently, the Tribunal granted an unconditional waiver of pre-deposit of the dues against the appellant and stayed the recovery during the appeal's pendency.