2014 (1) TMI 1448 - AT - Service Tax

CESTAT Ahmedabad Grants Waiver for Service Tax Pre-Deposit

The Appellate Tribunal CESTAT Ahmedabad granted the appellant's request for a waiver of pre-deposit of service tax liability under Sections 76, 77 & ... Waiver of pre deposit - Site formation and clearance, excavation, earth moving and demolition services - Held that:- by the tender awarded to the appellant, the activity in the scope of work to the appellant is for maintenance of the mine and also for excavation of lignite and other ores from the said mine. To complete the mining work, it is common knowledge that over burden has to be removed which also contains minerals which have been mentioned in the said tender awarded to the appellant. We find that prima facie the issue seems to be covered by the judgment of this Tribunal in the case of Vijay Leasing Company - [2010 (12) TMI 782 - CESTAT, BANGALORE] and M. Ramakrishna Reddy - [2008 (10) TMI 115 - CESTAT, BANGALORE]. In view of the foregoing, we are of the opinion that the appellant has made out a prima facie case for the waiver of the pre-deposit of the amounts involved - Stay granted. Issues:Waiver of pre-deposit of service tax liability under Sections 76, 77 & 78 of the Finance Act, 1994 based on the nature of services provided by the appellant.Analysis:The appellant filed a stay petition seeking the waiver of pre-deposit of an amount of Rs. 2,10,25,661/- confirmed as service tax liability along with interest and penalties under Sections 76, 77 & 78 of the Finance Act, 1994. The dispute arose from the nature of services provided by the appellant, who claimed to be engaged in mining work, which they argued became liable to service tax from 1-6-2007. The tax authorities, however, confirmed the liability based on the services of site formation, clearance, excavation, earth moving, and demolition provided by the appellant.Upon hearing both sides and examining the records, the Tribunal noted that the appellant's scope of work under the awarded tender involved maintenance of the mine and excavation of lignite and other ores. It was observed that for mining work, overburden removal is necessary, which also contains minerals as mentioned in the tender. The Tribunal found that the issue at hand was similar to cases previously adjudicated by the Tribunal, specifically referencing judgments in the cases of Vijay Leasing Company and M. Ramakrishna Reddy.Based on the prima facie assessment and considering the precedents, the Tribunal concluded that the appellant had established a case for the waiver of the pre-deposit amount. Consequently, the Tribunal allowed the application for the waiver of pre-deposit and stayed the recovery of the amounts involved until the appeal was disposed of. The decision was made in favor of the appellant, granting the requested relief and providing a temporary stay on the recovery of the disputed service tax liability, interest, and penalties.In summary, the judgment by the Appellate Tribunal CESTAT Ahmedabad pertained to the waiver of pre-deposit of service tax liability under Sections 76, 77 & 78 of the Finance Act, 1994, based on the nature of services provided by the appellant. The Tribunal, after considering the arguments and examining the records, found merit in the appellant's claim that their activities were akin to mining work, justifying the waiver of the pre-deposit amount. The decision was influenced by the scope of work outlined in the awarded tender and previous Tribunal judgments dealing with similar issues, leading to the grant of the requested relief and a stay on recovery pending the appeal's disposal.