2014 (12) TMI 705 - AT - Service Tax

Tribunal grants stay, waives predeposit, stays recovery pending appeal. Appellant's prima facie case considered.

Brahma Developers Versus Commissioner of Central Excise, Tirunelveli

The Tribunal granted the stay application, waiving the predeposit of duty and penalty, and stayed the recovery of the amount until the appeal's final ... Waiver of predeposit - Construction of Complex Service - Held that:- Appellant carried out construction of residential quarters to the government through CPWD. On a perusal of the work order dt. 29.11.2006 issued by the CPWD wherein the appellant was awarded construction of 134 numbers of Type II residential accommodation for BSF Campus, Thekkalore village Avinash Taluk, Coimbatore District, Tamil Nadu which includes internal water supply, sanitary and drainage etc. Similar contracts have also been awarded for construction of hostel complex, Lecturers' Quarters for Central University of Tamil Nadu, Tiruvarur etc. Construction of residential complex is for BSF, Lecturers' quarters etc. is meant for their employees. The Award of Contracts issued by CPWD is on behalf of President of India and also the guarantee was executed by the appellant is also on behalf of the President of India. Therefore, in view of the decisions of this very Bench, (2013 (8) TMI 262 - CESTAT CHENNAI) and other decisions of the Tribunal, we are of the view that the appellant has made out a prima facie case for waiver of entire amount of tax along with interest and penalty. Accordingly, the predeposit of service tax along with interest and penalty is waived and recovery thereof is stayed till disposal of the appeal - Stay granted. Issues Involved:Stay application for waiver of predeposit of duty and penalty against Order-in-Original No.08/ST/COMMR/2013 passed by the Commissioner of Central Excise, Tirunelvei.Analysis:Issue 1: Stay Application for Waiver of PredepositThe appellant filed a stay application seeking waiver of predeposit of duty and penalty against the Order-in-Original passed by the Commissioner of Central Excise, Tirunelvei. The case involved a demand for service tax under 'Construction of Complex Service' for the construction of residential buildings for the BSF Campus through CPWD. The adjudicating authority confirmed the service tax along with interest and imposed penalties under relevant sections of the Finance Act, 1994.Issue 2: Arguments of the Appellant and RespondentThe appellant contended that the construction of residential quarters for BSF and other authorities through CPWD should not be taxable as the quarters belong to the Government of India and are exclusively used for BSF personnel. They argued that the construction was not for commercial sale but for the government, making them eligible for abatement under Notification 1/2006. The appellant cited relevant Tribunal decisions to support their case. On the other hand, the Ld. A.R reiterated the findings of the Order-in-Original, stating that the appellant provided services to CPWD and received consideration for the construction.Issue 3: Tribunal's Analysis and DecisionAfter hearing both sides, the Tribunal observed that the appellant indeed carried out construction of residential quarters for the government through CPWD. The work orders issued by CPWD indicated the construction projects for various government entities. The Tribunal noted that the construction was for specific government entities like BSF and lecturers, meant for their employees. Considering the nature of the contracts being on behalf of the President of India and the guarantees executed likewise, the Tribunal found a prima facie case for waiver of the entire tax amount, interest, and penalty. Citing previous decisions of the Tribunal, the Tribunal granted the stay application, waiving the predeposit of service tax, interest, and penalty until the appeal's disposal.In conclusion, the Tribunal allowed the stay application, waiving the predeposit of duty and penalty, and stayed the recovery of the amount until the appeal's final disposal. The decision was based on the prima facie case made by the appellant regarding the nature of the construction projects for government entities and the applicability of relevant notifications and legal provisions.