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of <h1>Tax Tribunal Allows Partial Waiver, Requires Pre-Deposit</h1> The Tribunal found merit in the argument that the demand of tax on the gross value was not sustainable. It directed the applicants to make a pre-deposit ... Waiver of pre deposit - Erection, Commissioning or Installation Service - Works Contract Service - Held that:- S. Packiaraj, Proprietor of the applicant company in his statement stated that the nature of activity of their firm is installation of various electrical devices as per the requirement of various customers - Services rendered by them are supply of materials as erection commissioning or installation service. It is also noted that the applicants supplied the materials to the customers and therefore they have claimed the service under the category of works contract service for the period 01.06.2007 to 31.03.2010. Prima facie the demand of tax on the gross value is not sustainable. The classification of the service under the category of erection, commissioning or installation service or the works contract service would be decided after hearing at length at the time of appeal hearing. Hence, the applicants have failed to make out a strong prima facie case for waiver of predeposit of entire amount of tax along with interest and penalty. - Partial stay granted. Issues: Service tax demand for construction of electrical installation work under 'Erection, Commissioning or Installation Service' and 'Works Contract Service'.Analysis:The judgment involves two applications arising from a common order regarding a service tax demand of Rs. 71,82,478/- along with interest and penalty for the period October 2005 to March 2006. The applicants, engaged in construction of electrical installation work, argued that the activities should be classified under Works Contract service from June 2007. They contested the demand under 'Erection, Commissioning or Installation Service' prior to June 2007, stating it was not sustainable. The Revenue, however, argued that the services provided fell under 'Erection, Commissioning or Installation Service' based on agreements with clients. The Tribunal noted the nature of the firm's activities involved installation of electrical devices and supply of materials to customers. The applicants claimed the service under Works Contract service for a later period. The Tribunal found merit in the argument that the demand of tax on the gross value was not sustainable. It directed the applicants to make a pre-deposit of Rs. 30,00,000/- within eight weeks, with the balance amount of tax, interest, and penalty waived pending appeal. The Tribunal also allowed adjustment of a previously paid amount of Rs. 23,34,352/- subject to verification by the Divisional Office.In conclusion, the judgment addressed the classification of services provided by the applicants under 'Erection, Commissioning or Installation Service' and 'Works Contract Service'. It highlighted the importance of prima facie case for waiver of pre-deposit and directed the applicants to make a specified pre-deposit amount. The Tribunal emphasized the need for verification of previously paid amounts and set a deadline for compliance reporting.
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