2016 (7) TMI 600 - AT - Service Tax

Waiver of pre-deposit - seeking modification in the earlier order - construction of residential units. - The period involved is 2007-08 to 2011-12. The moot contention of the appellant is that they have been regularly filing return and paying tax under CRCS. Only because the department has classified it as works contract service, the present demand for differential duty has been made. It is also to be noted that they are not given the benefit of abatement even after remand of the case by the Tribunal. We are convinced that there is an error apparent on the face of record as the Tribunal in the said order has not taken into consideration the claim of abatement made by appellant and also the fact that they have been paying tax without fail under the category CRCS. - stay order modified - the amount of ₹ 1 crore paid by the appellant would suffice pre-deposit for the purpose of Section 35 F and we hereby grant waiver of the balance. - Decided partly in favor of applicant.

Summary

Issues:
Rectification of mistake/modification of stay order regarding pre-deposit amount in service tax case involving classification as works contract service and abatement claim.

Analysis:
The appellant undertook construction projects under agreements with landowners and buyers, paying Service Tax under Construction of Residential Complex Service (CRCS). The department issued a notice reclassifying services as works contract service, demanding a significant sum as service tax. The original authority confirmed the demand, penalty, and interest. The appellant claimed abatement under Notification No.1/2006-ST, emphasizing regular tax payments under CRCS. Despite no objection earlier, the department later disallowed abatement, citing works contract service classification. The Tribunal previously remanded the case, noting the failure to consider abatement claims. The appellant argued that the pre-deposit order did not consider these crucial aspects.

The Tribunal reviewed the stay order and acknowledged the appellant's contentions. The period in question was 2007-08 to 2011-12, during which the appellant consistently paid tax under CRCS. The failure to grant abatement post-remand and classify the services as works contract led to the demand for differential duty. The Tribunal identified an error in not considering the abatement claim and the appellant's tax compliance under CRCS. Consequently, the Tribunal modified the pre-deposit amount, deeming the already paid sum sufficient under Section 35 F, granting a waiver for the balance. The appellant's compliance with the modified pre-deposit led to a stay of recovery pending appeal disposal.