Tribunal requires 25% pre-deposit of service tax within 8 weeks to avoid appeal dismissal.

The tribunal ordered the applicant to pre-deposit 25% of the confirmed service tax amount within eight weeks. Failure to comply would result in the dismissal of the appeal, while the balance amount of service tax and penalty would be waived, with recovery stayed during the appeal's pendency.

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Issues Involved:
1. Waiver of pre-deposit of duty and penalty.
2. Splitting of contracts into supply and services.
3. Applicability of service tax on works contract.
4. Entitlement to abatement under Notification Nos. 19/2003-S.T. and 1/2006-S.T.
5. Invocation of extended period of limitation.
6. Financial hardship and pre-deposit requirement.

Issue-wise Detailed Analysis:

1. Waiver of Pre-deposit of Duty and Penalty:
The application sought waiver of pre-deposit of duty amounting to Rs. 7,21,52,207/- and an equivalent amount of penalty imposed under Section 78 of the Finance Act, 1994. The tribunal directed the applicant to make a pre-deposit of 25% of the service tax confirmed within eight weeks, failing which the appeal would be dismissed.

2. Splitting of Contracts into Supply and Services:
The applicant entered into two separate agreements with clients: one for the supply of plant, machinery, and equipment, and another for works and services such as erection, installation, and commissioning. The applicant argued that these were turnkey projects and should be treated as works contracts. However, the tribunal noted that the applicant consciously divided the projects into two separate agreements and registered for service tax under the category of erection and commissioning services from 1-4-2006.

3. Applicability of Service Tax on Works Contract:
The applicant contended that the projects should be classified as works contracts and thus taxable only from 1-7-2007. The tribunal rejected this argument, stating that the applicant had treated the contracts as separate for supply and services and had paid service tax accordingly. The tribunal found no merit in the argument that the projects should be considered turnkey projects due to the cross-fall-breach clause.

4. Entitlement to Abatement under Notification Nos. 19/2003-S.T. and 1/2006-S.T.:
The applicant claimed abatement of 67% under the said notifications, arguing that the works and services contracts involved the supply of structural steel. The tribunal noted that this claim was not raised before the lower authority and could not be verified. The tribunal held that the contracts appeared to be pure works and services contracts, separate from the supply contracts, and thus did not satisfy the conditions for abatement under the notifications.

5. Invocation of Extended Period of Limitation:
The tribunal found that the adjudicating authority had recorded a reasoned finding on the issue of limitation. It was noted that this issue involved mixed questions of fact and law, which would be considered in detail during the disposal of the appeal.

6. Financial Hardship and Pre-deposit Requirement:
The applicant did not plead financial hardship. The tribunal, considering the interest of revenue and the principles governing the waiver of pre-deposit, directed the applicant to deposit 25% of the confirmed service tax amount.

Conclusion:
The tribunal ordered the applicant to pre-deposit 25% of the service tax confirmed and report compliance. The balance amount of service tax and penalty would be waived, and recovery stayed during the pendency of the appeal. Failure to comply would result in the dismissal of the appeal.

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