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of <h1>Tribunal favors appellant, orders pre-deposit for disputed tax demand on finishing services. Stay granted on balance demand.</h1> The Tribunal ruled in favor of the appellant, directing a pre-deposit of Rs. 15,00,000 within a specified timeframe for the disputed tax demand related to ... Commercial or Industrial construction Service - Appellant submits that the description of service “finishing” was brought to the statute book for taxation w.e.f. 16-6-05 making necessary amendment to the definition of Commercial or Industrial construction Service - The amendment resulted to bring industrial construction service into the fold of law for taxation. Accordingly, the service was renamed as commercial or industrial construction service. - He submits that law does not prescribe to tax the goods while that is used in providing service of above nature. The goods component involved in the service in relation to the redefined period was 70% of the gross value of the contract executed after 16-6-05. The period in dispute is 10-9-04 to 31-3-07. Therefore pre-deposit may not be insisted when goods were involved in the work without service being provided. - Taking into consideration of Rs. 21,00,000/- (Rupees Twenty One Lakhs) that has been deposited is attributable to the period 16-6-05 to 31-3-07, and the valuation is in dispute, we direct the appellant to make pre-deposit of Rs. 15,00,000/- - balance demand stayed - pre-deposit of Education Cess is waived Issues:Taxability of finishing service under Commercial or Industrial Construction Service; Dispute over service tax demand for the period pre and post 16-6-05; Valuation dispute; Requirement of pre-deposit; Waiver of Education Cess pre-deposit.Analysis:The appeal concerns the taxability of the finishing service under the Commercial or Industrial Construction Service. The appellant argues that the amendment in the definition of the service brought finishing services under taxation from 16-6-05, renaming it as commercial or industrial construction service. The appellant contends that the law does not mandate taxing goods used in providing the service. The dispute centers on the tax demand for the period pre and post 16-6-05, with the appellant asserting that pre-deposit should not be insisted when goods were involved without service provision. The demand for the period 10-9-04 to 15-6-05, when finishing activity was not taxable, is contested by the appellant, seeking a reduction in the tax demand. The learned DR argues that the tax demand should be reduced for the post-16-6-05 period when finishing activity became taxable. The valuation dispute arises from the interpretation of the law and the material composition involved in the service.The authorized representative highlights discrepancies in the adjudicating authority's decision, emphasizing that the entire receipt for the period from 10-9-04 to 31-3-07 was taxed, overlooking the taxable events post the amendment on 16-6-05. The Tribunal acknowledges both parties' contentions, noting the need for evidence to determine the value of the taxable service. Considering the amount already deposited by the appellant and the disputed valuation, the Tribunal directs a pre-deposit to be made within a specified timeframe. The pre-deposit is set at Rs. 15,00,000, with compliance required by a designated date. The Tribunal stays the realization of the balance demand pending the appeal's disposal, focusing solely on the service tax demand. Additionally, the Tribunal waives the pre-deposit requirement for Education Cess during the appeal's pendency, providing relief in that aspect.
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