2015 (4) TMI 461 - AT - Service Tax

Waiver of pre deposit - Erection, Commissioning or Installation Service - Abatement of 67% - Jurisdiction of authority - Held that - jurisdictional commissioner, who passed the impugned order is having the jurisdiction only for the office registered in Delhi. For the other locations, Faridabad, Noida and Alwar, the adjudicating authority has no jurisdiction. Therefore, the demands pertain to those jurisdiction are not sustainable as held by this Tribunal in the case of Tina Sales Agecy Vs. CCE (Prev.), Mumbai 2015 (1) TMI 207 - CESTAT MUMBAI and in the case of Vihar Aahar Pvt Ltd. Vs. CST, Ahmedabad 2012 (11) TMI 370 - CESTAT AHMEDABAD . Therefore, the demand pertains to the contract receipts of ₹ 4,43,70,778/- for which service tax works out to ₹ 51,31,929/-.. Prima facie, the demand is not sustainable. For the rest of the demands, the applicant, prima facie, entitled for 67% abatement. In these circumstances, the demand pertains to Delhi jurisdiction is worked out to ₹ 5,62,18,873/-. The applicant is entitled for 67% abatement on the amount. - Partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit under the Finance Act, 1994 for demand of service tax, interest, and penalties related to "Erection, Commissioning or Installation Service" (ECIS).
2. Jurisdictional concerns regarding service tax liability for activities conducted in different locations.
3. Eligibility for abatement under Notification No.12/2003-ST and Notification No.1/2006-ST.
4. Classification of activities under ECIS and Works Contract, impacting service tax liability.

Analysis:
1. The appellant sought waiver of pre-deposit for a substantial amount confirmed under ECIS. The appellant argued that the demand was based on gross figures without considering service tax liabilities discharged in other jurisdictions. They claimed exemption under Notifications No.12/2003-ST and No.1/2006-ST, emphasizing VAT payment on goods supplied and service tax liability on the labor component. The appellant also contended that activities prior to 01.06.2007 were covered under Works Contract, not ECIS, challenging the sustainability of demands post that date.

2. The Departmental Representative opposed the waiver, highlighting the appellant's failure to prove jurisdictional limitations and cost components for VAT discharge. However, the Tribunal found merit in the appellant's jurisdictional argument, citing precedents like Tina Sales Agency Vs. CCE (Prev.), Mumbai and Vihar Aahar Pvt Ltd. Vs. CST, Ahmedabad. The Tribunal concluded that demands related to locations beyond Delhi jurisdiction were not sustainable, reducing the service tax liability significantly. The appellant was directed to pay 33% of the reduced amount within a specified timeframe to proceed with the appeal, with recovery of remaining liabilities stayed during the appeal's pendency.

3. The Tribunal's decision provided a nuanced analysis of the jurisdictional issues and abatement eligibility, balancing the appellant's contentions with legal precedents and statutory provisions. By clarifying the applicable service tax rates and abatement percentages, the Tribunal ensured a fair resolution while upholding the principles of tax compliance and jurisdictional limitations. The judgment underscored the importance of evidence-based arguments and adherence to legal provisions in tax disputes, ultimately guiding the parties towards a structured resolution process within the legal framework.