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of <h1>Tribunal rules in favor of appellants in construction service tax case, waives pre-deposit requirement</h1> <h3>VASU CONSTRUCTION Versus COMMISSIONER OF CENTRAL EXCISE, DAMAN</h3> The Tribunal found in favor of the appellants in a Service Tax case involving construction services, ruling that the contract was primarily for tower ... Stay Petition - construction of towers - condition of pre-deposit - (i) Commercial and Industrial Construction Service and (ii) Site Formation & Clearance Excavation & Earthmoving and Demolition service. - Held that:- Admittedly, no construction can be effected without first clearing land from unwanted material and preparing the same for construction. The efforts of the lower authority to de-link the above activity from main activity of construction and to hold that the same falls under the category of Site Formation & Clearance Excavation & Earthmoving and Demolition service, does not appear to be in accordance with the law. - pre-deposit of duty, penalty waived and Stay Petition allowed Issues:Stay Petition for pre-deposit of Service Tax liability and penalty.Analysis:The appellants, engaged in construction business, entered into a Works Contract with a company for civil work of telecommunication towers. During a Service Tax audit, it was observed that the appellants provided two types of services. A Show Cause Notice was issued alleging improper availing of abatement and demanding payment. The appellants contended that they were providing construction services eligible for abatement. They cited a precedent where similar services were considered construction services. The appellants argued that the Commissioner did not consider relevant clauses of the contract and definitions of services. The Tribunal found the contract primarily for tower construction, with other activities being incidental. The lower authority's attempt to separate these activities was deemed incorrect. The Tribunal held that the appellants had a strong case on merit and dispensed with the pre-deposit condition of duty and penalty, allowing the Stay Petition unconditionally.
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