Prima facie works contract classification for transmission tower installation justified waiver of pre-deposit pending appeal.

Erection, commissioning and installation of transmission towers were examined under Board Circular No. B1/16/2007-TRU dated 22.05.2007 and treated, on a prima facie basis, as works contract service. Because the disputed activity was provisionally covered by that classification, the demand for service tax, interest and penalties was regarded as not sustainable at the interim stage. The pre-deposit requirement was therefore waived pending disposal of the appeal.

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Issues: Whether the assessee was required to make pre-deposit of service tax, interest and penalties in respect of the demand arising from erection, commissioning and installation of transmission towers, and whether the activity was prima facie classifiable as works contract service.

Analysis: The activity of erection, commissioning and installation of transmission towers was examined in the light of Board Circular No. B1/16/2007-TRU dated 22.05.2007. On a prima facie basis, the activity was regarded as falling under works contract service. In view of this prima facie classification, the demands were treated as not sustainable at the interim stage, justifying waiver of the pre-deposit during the pendency of the appeal.

Conclusion: The requirement of pre-deposit of service tax, interest and penalties was waived in favour of the assessee.

Ratio Decidendi: Where the disputed activity is prima facie covered by works contract service under the applicable Board circular, pre-deposit may be waived pending disposal of the appeal.

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