2014 (12) TMI 871 - AT - Service Tax

Tribunal orders partial tax deposit for construction service applicant, waiver upon payment, appeal stay

M/s. P. Mariappan & Sons Versus CCE (ST), Madurai

M/s. P. Mariappan & Sons Versus CCE (ST), Madurai - TMI Issues:1. Application for waiver of predeposit of tax under 'Commercial and Industrial Construction Service'.Analysis:The applicant sought waiver of predeposit of tax amounting to Rs. 6,15,809/- with interest and penalty for the period 01.05.2006 to 23.02.2009 under the category of 'Commercial and Industrial Construction Service'. The demand of tax was related to the construction of the Control Room of TNEB at Madurai Meenakshiamman Temple and buildings for Gandhigram Rural University. The applicant argued that the tax demand for the TNEB construction was exempted retrospectively by Notification No. 45/2010-ST, citing relevant tribunal decisions. However, the Tribunal found that the exemption was related to electricity transmission, not construction, and thus did not apply. Similarly, the tax demand for Gandhigram Rural University construction was not considered exempt as the university collected fees for imparting skills, distinguishing it from the case law cited by the applicant.The Tribunal concluded that the applicant failed to establish a strong prima facie case for the waiver of the entire tax amount with interest and penalty. Despite the applicant's financial hardship due to being out of business since 2009, the Tribunal directed a pre-deposit of Rs. 1,50,000/- within eight weeks. Upon this deposit, the balance tax amount along with interest and penalty would be waived, and recovery stayed until the appeal's disposal. The compliance was to be reported by a specified date.In summary, the Tribunal denied the full waiver of the tax amount requested by the applicant under the 'Commercial and Industrial Construction Service'. Instead, a partial pre-deposit was ordered, considering the lack of a strong prima facie case and the applicant's financial hardship.