Works contract service dispute: sewage pipeline and allied civil works supported waiver of pre-deposit and stay of recovery.

Laying and commissioning of a sewage pipeline, together with excavation, inspection chambers and allied civil works for a municipal corporation, was treated as outside works contract service in view of the Tribunal's earlier view on the activity. On that basis, the applicant was found to have a strong prima facie case in proceedings seeking waiver of pre-deposit and stay of recovery. The pre-deposit requirement for service tax, interest and penalties was waived, and recovery was stayed pending disposal of the appeal.

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Issues: Whether the applicant had made out a prima facie case for waiver of pre-deposit and stay of recovery in proceedings relating to works contract service.

Analysis: The activity was undertaken for a municipal corporation and consisted of laying and commissioning of sewage pipeline along with excavation, construction of inspection chambers and allied civil works. In view of the Tribunal's earlier view that such activity was not covered under works contract service, the applicant was found to have a strong prima facie case.

Conclusion: The requirement of pre-deposit of the service tax, interest and penalties was waived and recovery was stayed during pendency of the appeal.

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