Prima facie exemption and works contract exclusion justified limited pre-deposit, with recovery stayed pending appeal.

In an interim stay matter involving construction services, the tribunal noted that the demand covered distinct activities but the consideration was not segregated in the show cause notices or the impugned order. On a prima facie basis, construction of the corporate office for the electricity distribution utility did not clearly appear taxable as a service related to transmission of electricity, and the works contract nature of the activity also supported exclusion of the goods component. Because the taxable exposure had to be estimated broadly in the absence of segregation, the tribunal directed a limited pre-deposit of Rs. 18 lakhs plus proportionate interest and stayed recovery pending appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and complete stay pending appeal in a dispute involving construction services and exemption claims.

Analysis: The demand arose from two show cause notices covering construction of independent residential units and construction of a corporate office. The consideration for the two activities was not segregated in either the notices or the impugned order. On a prima facie view, construction of the corporate office for the electricity distribution utility did not appear to be taxable as a service in relation to transmission of electricity. Alternatively, the work was treated as a works contract involving both goods and services, making the value of the goods component eligible for exclusion. In the absence of segregation of the consideration, the liability was estimated broadly, and the estimated taxable exposure after the available exemption benefit was assessed at about Rs. 18 lakhs.

Conclusion: The appellant was directed to pre-deposit Rs. 18 lakhs plus proportionate interest within six weeks, and recovery proceedings were stayed during pendency of the appeal.

Ratio Decidendi: In an interim stay matter, where the demand is not segregated between distinct activities and the assessee shows a prima facie entitlement to exemption or exclusion of the goods component in a works contract, the tribunal may fix a limited pre-deposit on a broad estimated liability and grant stay of recovery pending appeal.

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