2015 (9) TMI 1329 - AT - Service Tax

Waiver of pre deposit - Commercial & Industrial Construction Service, Construction of Residential Complex Service, Dredging Service, Management & Maintenance Service and Erection & Commissioning service - Held that - Taking into consideration Tribunal s stay order 2013 (12) TMI 495 - CESTAT CHENNAI in appellant s own case, and also taking into consideration the value of construction commercial construction activity disputed by the appellant as non-commercial activity, we direct the appellant to pre-deposit a sum of ₹ 25,00,000 within 8 weeks - Partial stay granted.

Summary

Issues:
1. Confirmation of service tax demand under various services.
2. Exclusion of certain projects from the demand.
3. Eligibility for cum tax benefit and abatement.
4. Nature of construction activity carried out for specific boards.
5. Pre-deposit amount and stay of recovery during appeal.

Analysis:
1. The adjudicating authority confirmed a substantial service tax demand under different services, including Commercial & Industrial Construction Service, Construction of Residential Complex Service, Dredging Service, Management & Maintenance Service, and Erection & Commissioning service. The demand amounted to Rs. 5,23,52,898/- and Rs. 17,48,04,501/- in two separate orders imposing penalties and interest.

2. The appellant's senior counsel presented a detailed worksheet for the periods April '10 to March '11 and April '11 to March '12, highlighting that a significant portion of the demand stemmed from non-commercial construction activities for government bodies like TN Slum Clearance Board, CMDA, and TN Police Commissioner's office. The counsel argued that certain services provided to the Tamil Nadu Government under specific schemes were exempted. By excluding these projects, the demand reduced to approximately Rs. 7 crores. The appellant claimed eligibility for cum tax benefit and abatement based on previous tribunal orders.

3. The appellant referred to a previous tribunal order in their own case, where a pre-deposit of Rs. 50 lakhs was ordered, later modified by the Madras High Court to a bank guarantee of the same amount. The appellant agreed to pre-deposit the revised amount as per the tribunal's order.

4. The Assistant Commissioner argued that construction activities for TN Slum Clearance Board and Karnataka Housing Board should be considered commercial and taxable.

5. After considering both sides and the previous tribunal order in the appellant's case, the Tribunal directed the appellant to pre-deposit Rs. 25,00,000/- within 8 weeks and report compliance by a specified date. Upon this deposit, there would be a waiver of further pre-deposit and a stay on the recovery of the remaining demand during the appeal process.