Tribunal orders Rs. 1,00,00,000 predeposit for appellants pending appeal

The Tribunal directed the appellants to make a predeposit of Rs. 1,00,00,000/- within a specified timeframe, with the previous payment considered, subject to verification. Compliance with this requirement would lead to a waiver of predeposit and stay of recovery of the remaining demand during the appeal process. The appellants' claims regarding Notification 1/06 and non-taxability of educational institutions were considered, but they were not able to establish a prima facie case for total waiver, resulting in the directive for predeposit.

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Issues:
Waiver of predeposit and stay of recovery of adjudged dues in the impugned order.

Analysis:
The applicant sought waiver of predeposit and stay of recovery of adjudged dues amounting to Rs. 4,36,02,993/- along with penalties imposed under Section 77(1)(a) and 77(2) of the Finance Act, 1994. The demand was confirmed under the category of Works Contract Service (WCS) for the period from Oct'07 to March'12. The appellant claimed eligibility for benefits under Notification No.1/06 and exclusion of the value of materials sold. The advocate highlighted that they had already paid Rs. 61,95,312/- towards service tax, which was not considered in the order. The appellant argued that they were registered for service tax under Construction Service, not WCS, and that they were entitled to exemptions for construction of educational institutions. The appellant was directed to predeposit Rs. 1,00,00,000/- within 8 weeks, with the previous payment considered as part of the deposit, subject to verification by the department. Compliance was to be reported by a specified date for waiver of predeposit and stay of recovery of the remaining demand during the appeal process.

The advocate relied on various decisions to support the appellant's case, emphasizing the interim stay granted by the Bench regarding the construction of educational institutions. On the other hand, the respondent reiterated that the classification under WCS was correct and that there was no evidence of material used and sold to substantiate the demand. The respondent argued that there was no exemption for construction of educational institutions under the Finance Act, pointing out that the Board's circular regarding the issue had been rescinded in 2007. The respondent also highlighted that a High Court order relied upon by the advocate was interim in nature concerning WCS.

Upon hearing both sides, it was noted that the appellants were registered for the construction of residential complexes under service tax but not under WCS, which was effective from 1.6.2007. The appellant's claims regarding Notification 1/06 and non-taxability of educational institutions were considered. The appellants were directed to make a predeposit of Rs. 1,00,00,000/- within a specified timeframe, with the previous payment being accounted for, subject to verification. The Tribunal found that the appellants had not established a prima facie case for total waiver, leading to the directive for predeposit. Compliance with the predeposit requirement would result in a waiver of predeposit and stay of recovery of the remaining demand during the appeal process.

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