2016 (9) TMI 433 - AT - Service Tax

Waiver of pre-deposit - Demand alongwith interest and penalties - Commercial or Industrial Construction service and Repair and Maintenance services - construction of bathrooms, routine maintenance of station buildings and routine cleaning of plant area - period involved is April, 2011 to September, 2011 - Held that - admittedly, the painting of residential quarters of Nashik thermal power station are not covered under commercial or industrial services. Therefore, this Tribunal arrived on the decision that painting of residential quarters do not qualify as a service provided is of commercial or industrial in nature, but in this case, all the activities have been provided to thermal power station. Therefore, the appellant is not able to make out a case for complete waiver of pre-deposit. Therefore, we direct the appellant to make a pre-deposit of 25% of the service tax amount in dispute within four weeks. Balance amount of service tax, interest and penalty shall remain stayed off during the pendency of appeal. - Waiver partly granted

Summary

Issues:
1. Confirmation of service tax demand under 'Commercial or Industrial Construction service' and 'Repair and Maintenance services'.
2. Applicability of service tax on activities undertaken by the appellant for a thermal power plant.
3. Interpretation of the term 'Commercial or Industrial Construction service' and 'Repair and Maintenance services'.
4. Comparison of the case at hand with the precedent set by P.B. Rathod case.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHANDIGARH dealt with the confirmation of a service tax demand against the appellant for providing services under the categories of 'Commercial or Industrial Construction service' and 'Repair and Maintenance services' during a specific period. The appellant had undertaken activities like construction of bathrooms, routine maintenance of station buildings, and routine cleaning of the plant area for a thermal power plant owned by Punjab Electricity Board.

The appellant argued that the thermal power plant did not fall under the category of a commercial or industrial concern, thus the activities did not qualify as 'Commercial or Industrial Construction service'. Additionally, the appellant contended that the cleaning services provided did not meet the criteria for maintenance services, as they were maintaining and repairing station buildings. The appellant relied on the decision in the P.B. Rathod case to support their argument.

On the contrary, the Revenue asserted that the thermal power plant was indeed a commercial or industrial concern, making any service provided to them fall under commercial or industrial construction service. The Revenue argued that the P.B. Rathod case was not applicable to the current situation, and suggested the appellant make a pre-deposit.

After hearing both parties, the Tribunal considered the submissions and examined the P.B. Rathod case. The Tribunal noted that while painting residential quarters in the P.B. Rathod case did not qualify as commercial or industrial services, in the present case, all activities were provided to the thermal power station. Consequently, the Tribunal concluded that the appellant failed to establish a case for a complete waiver of pre-deposit. The Tribunal directed the appellant to make a pre-deposit of 25% of the service tax amount in dispute within four weeks, with the balance amount of service tax, interest, and penalty to remain stayed during the appeal process.