2015 (1) TMI 82 - AT - Service Tax

Waiver of pre deposit - Errection, Commissioning or Installation service - Held that - Prima facie, we satisfied that services provided by the petitioner in relation to its activities under an agreement entered into in respect of the ITR Balasore and the Jaipur Development Authority and the consequent assessment in this behalf are not sustainable since the adjudication order contains no satisfactory reasons for bringing the activities within the fold of the taxable service under Section 65(39a) read with Section 65(105)(zzd). Insofar as the service provided by the petitioner in relation to the JDA is concerned, the petitioner has already remitted Service Tax in respect of the service component and claimed that the value of the goods sold by the petitioner to the JDA as part of the composite contract would be exigible to tax. Without any analysis of this contention, the adjudicating authority has brought the whole of the amounts received by the petitioner from JDA to tax. To this extent the order of the adjudicating authority is prima facie unsustainable. Insofar as the assessment in respect of the service provided by the petitioner to the Health and Family Welfare Department, Government of Kerala is concerned, we prima facie find no infirmity on this aspect except that despite the petitioner s claim, the adjudicating authority failed to grant benefits of Notification No. 1/2006-S.T., dated 1-3-2006, issued by the Government of India whereby only 33% of the gross value should be taken as the taxable value of the service. - Partial stay granted.

Summary

Issues:
Service Tax liability for providing 'Errection, Commissioning or Installation' service to three different entities.

Analysis:

Issue 1: Prima facie sustainability of Service Tax liability for services provided to Integrated Test Range, Jaipur Development Authority, and Government of Kerala.
The Tribunal found the adjudication order lacking satisfactory reasons for bringing the activities under the taxable service category. The order was deemed unsustainable for services provided to Integrated Test Range, Balasore, and Jaipur Development Authority as no analysis was done regarding the taxability of goods sold as part of a composite contract. However, the assessment for services provided to the Health and Family Welfare Department, Government of Kerala was considered prima facie valid, except for the failure to grant benefits of a specific notification reducing the taxable value to 33% of the gross value.

Issue 2: Waiver of pre-deposit and stay of further proceedings.
Based on the prima facie analysis, the Tribunal granted a waiver of pre-deposit and stay of all further proceedings related to the adjudication order dated 30-11-2011. The appellant was required to remit a specific amount to the credit of Revenue within a set timeframe and report compliance accordingly. Failure to comply would result in the dissolution of the waiver and rejection of the appeal.

In conclusion, the Tribunal analyzed the sustainability of Service Tax liability for services provided to different entities, highlighting the lack of satisfactory reasons in the adjudication order for certain aspects. A waiver of pre-deposit and stay of further proceedings was granted based on the prima facie analysis, subject to specific conditions for compliance.