2013 (10) TMI 1012 - AT - Service Tax

Tribunal distinguishes tank fabrication as erection services, orders Rs. 10 lakh pre-deposit

The Tribunal held that the fabrication of tanks at the site did not amount to manufacturing but fell under erection, commissioning, and installation ... Taxable services or manufacturing activity - Waiver of pre deposit - Cleaning services, commercial construction services, manpower recruitment and supply services, repair and maintenance services, erection, commissioning and installation services and supply of tangible goods for use services - Non registration with department - Held that:- as far as the fabrication or erection of tank at site is concerned, the activity brings into existence an immovable property. Therefore, it cannot be said that the appellant has undertaken any manufacturing activity defined under Section 2(f) of the Central Excise Act, 1944. Therefore, the activity undertaken by the appellant would qualify as erection, commissioning and installation services. According to the appellant, the liability would come to ₹ 10 lakhs. As regards other activities, we notice that the matter needs to be gone into detail which can be done at the time of final hearing of the appeal. At the interim stage, we find that the appellant had not made out a case for complete waiver of pre-deposit of the dues adjudged. Accordingly, we direct the appellant to make a pre-deposit ₹ 10 lakhs within a period of six weeks and report compliance on 2.9.2013. On such compliance, pre-deposit of balance of the dues adjudged against the appellant shall stand waived and recovery thereof stayed during the pendency of the appeal - Decided against assessee. Issues:Service Tax liability on various services provided by the appellant from April 2005 to November 2008. Classification of services under different categories. Appellant's contention regarding fabrication of tanks at site not being liable for Service Tax. Lack of documentary evidence for the supply of tangible goods for use. Appellant's plea for a stay on the demand confirmed by the impugned order.Service Tax Liability and Classification of Services:The appellant, M/s. V.G. Enterprises, provided a range of services from April 2005 to November 2008 but failed to register with the Service Tax department or discharge their Service Tax liability. A show-cause notice was issued proposing a demand of Rs. 95,37,908/- along with interest and penalties. During the investigation, the appellant paid Rs. 34,41,601/- towards Service Tax. The impugned order confirmed the demand, interest, and penalties. The appellant argued that the demand was confirmed without considering their submissions during the investigation and before the adjudicating authority. They contended that certain services, like the fabrication of tanks at the site, should not attract Service Tax as it amounts to manufacturing. They also claimed that for services provided before the inception of the levy, the demand was not sustainable in law.Fabrication of Tanks and Supply of Tangible Goods:The appellant argued that the fabrication of tanks at the site should not be considered as manufacturing as it results in immovable property. The activity was deemed as erection, commissioning, and installation services. The appellant claimed the liability for this activity to be Rs. 10 lakhs. Regarding the supply of tangible goods for use, the appellant failed to provide sufficient documentary evidence to support their claim. The Revenue contended that the appellant did not produce all necessary documents, and thus, the liability stands.Decision and Stay Application:The Tribunal found that the fabrication or erection of tanks at the site did not constitute manufacturing but fell under erection, commissioning, and installation services. The appellant was directed to make a pre-deposit of Rs. 10 lakhs within six weeks, with the balance of the dues waived upon compliance. The recovery of the dues was stayed during the appeal's pendency. The Tribunal noted that further examination of the other services would be conducted during the final hearing. The appellant's plea for a complete waiver of pre-deposit was not accepted, and they were required to comply with the specified amount within the given timeframe.