2014 (10) TMI 244 - AT - Service Tax

Waiver of pre deposit - Business Auxiliary Services, Industrial and Commercial Services, Works Contract Services, Erection, Commissioning and Installation Services, Intellectual Property Services - Held that - It is observed that the issues raised by both sides are contentious ones which can be gone into at the time of final hearing. Both sides have relied upon several judgments in support of their contentions. As an amount of ₹ 1,17,36,640/- has been already paid by the appellant, the same is considered to be sufficient deposit for the purpose of granting stay on the remaining amount till the disposal of this appeal - Stay granted.

Summary

Issues:
1. Stay application filed by the appellant regarding OIO No. VAD-EXCUS-001-COM-25-13-14 dated 30/12/2013.
2. Interpretation of Works Contract (Composition Scheme for payment of Service Tax) Rule 2007.
3. Classification of contracts as supply contract and service contract.
4. Consideration of amount already paid by the appellant for granting stay on remaining amounts.
5. Dispute regarding the nature of contracts and tax liability under service tax laws.

Analysis:
1. The appellant, registered with the Service Tax Dept., sought a stay on the operation of OIO No. VAD-EXCUS-001-COM-25-13-14 dated 30/12/2013. The appellant provides various services, including Business Auxiliary Services, Works Contract Services, and Intellectual Property Services to entities like M/s Steel Authority of India Ltd., M/s Damodar Valley Corporation, and M/s National Thermal Power Corporation.

2. The appellant argued that service tax should only be paid under the Works Contract Composition Scheme concerning the amount related to the service contract, not the supply contract. The appellant contended that a substantial amount had already been paid, which should be considered sufficient for granting a stay on the remaining amounts pending appeal.

3. On the other hand, the Revenue contended that the contracts with government departments and undertakings were turn-key projects, not separable into distinct supply and service contracts. The Revenue argued that breach of conditions in one contract would constitute a breach in the other contract, emphasizing the interconnected nature of the contracts.

4. After hearing both parties and reviewing the case records, the Tribunal noted the contentious nature of the issues raised, indicating they would be examined in detail during the final hearing. Given that the appellant had already paid a significant sum, the Tribunal considered it adequate as a deposit for granting a stay on the outstanding amount until the appeal's final disposal.

5. Consequently, the Tribunal granted a stay on the recovery of the remaining amounts until the appeal's resolution, recognizing the complexity of the contractual arrangements and tax implications involved in the case. The judgment was pronounced on 21.7.2014 by Mr. H.K. Thakur.