Composite service contracts and pre-deposit waiver: no splitting of activities for separate service tax levy on isolated components.

Composite charges under a single contract for erection, commissioning, installation, maintenance and repair were treated as a prima facie basis against splitting the activity for separate service tax levy on isolated components. As service tax had already been paid on maintenance and repair services, the appellant was found to have made out a prima facie case for waiver of pre-deposit of service tax and penalty, and full waiver of pre-deposit was granted with recovery stayed pending disposal of the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit of service tax and penalty demanded in relation to erection, commissioning, installation, maintenance and repair activities under a composite contract.

Analysis: The contract disclosed composite charges for the entire activity. Service tax had already been paid on maintenance and repair services. The cited authorities were treated as supporting the view that the activity was not to be split up for separate service tax levy on isolated components, and that the appellant's case required consideration at the appeal stage.

Outcome: Full waiver of pre-deposit was granted and recovery was stayed till disposal of the appeal.

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