2014 (12) TMI 501 - AT - Service Tax

Tribunal grants waiver of pre-deposit for service tax, interest, and penalties

KEDAR CONSTRUCTIONS Versus COMMISSIONER OF C. EX., KOLHAPUR

The Tribunal granted waiver of pre-deposit for service tax, interest, and penalties, considering exemptions under relevant notifications and the amount ... Waiver of pre deposit - construction and repair activity - construction of foundation walls for sub-station or control rooms, foundation for electricity tower etc - Exempted under Notification No. 45/2010-S.T., dated 20-7-2010 - Held that:- Applicants also relied on the Notification No. 11/2010-S.T. which provides exemption to services provided for transmission of electricity only. During the arguments, the applicants disclosed that the demand for the period after 26-2-2010 comes to approximately ₹ 11 lakhs. The applicants already deposited more than ₹ 18 Lakhs. In respect of the demand on the construction of hostel for women and Synthetic Track in the University, we find that there is no dispute regarding this activity and, prima facie, the activity is not commercial. In the above facts and circumstances of the case, the amount already deposited is sufficient for hearing of the appeal. Pre-deposit of the dues is waived and recovery thereof is stayed during the pendency of the appeal. - Stay granted. Issues:1. Waiver of pre-deposit of service tax, interest, and penalties.2. Exemption from payment of service tax for construction and repair activities related to electricity transmission.3. Dispute regarding demand for construction of Hostel and Synthetic Track.4. Interpretation of Notification No. 11/2010-S.T. exempting services for transmission of electricity.5. Sufficiency of amount deposited by the applicants for hearing the appeal.Analysis:1. The applicants sought waiver of pre-deposit of service tax, interest, and penalties amounting to Rs. 2,04,14,368. The major demand of approximately Rs. 1.99 crores was confirmed due to construction and repair activities chargeable to service tax.2. The contention of the applicants was that the activities undertaken for Maharashtra State Electricity Transmission Company Ltd. and Power Grid Corporation of India Ltd. were exempted from service tax under Notification No. 45/2010-S.T. and Notification No. 11/3020.S.T. The Tribunal found the demand not sustainable based on these notifications and a previous decision.3. Regarding the demand of Rs. 1.36 lakhs for construction of Hostel and Synthetic Track, the applicants argued it was not a commercial or industrial construction service. They had already deposited Rs. 18.54 lakhs during the investigation.4. The Revenue argued that Notification No. 11/2010-S.T. only exempts taxable services for transmission of electricity, not construction activities. The lower authority's findings were also relied upon by the Revenue.5. The Tribunal noted that the exemptions under Notification No. 45/2010-S.T. applied to activities related to transmission of electricity till specific dates. The applicants had also deposited more than the demanded amount. The Tribunal found the deposited amount sufficient for the appeal hearing and waived the pre-deposit of dues during the appeal's pendency.Conclusion:The Tribunal granted the waiver of pre-deposit for the service tax, interest, and penalties, considering the exemptions under relevant notifications and the amount already deposited by the applicants. The appeal was scheduled for a hearing based on the amount deposited and the issues raised regarding the service tax demands for construction and repair activities related to electricity transmission.