2010 (1) TMI 478 - AT - Service Tax

CESTAT Grants Partial Waiver of Predeposit for Service Tax Appeal

The Appellate Tribunal CESTAT, CHENNAI granted the waiver of predeposit of service tax and interest for the period 10-9-2004 to 1-6-2007 under 'Commercial ... Commercial and Industrial Construction services - Assessee constructed residential complex for Central Government and defence department. Service tax was demanded for this activity under 'Commercial or industrial construction services'. The applicant have made out prima facie case that they had entered into work contract w.e.f.01.06.2007. Held that - application for waiver of pre-deposit of service tax and interest during period 10.09.2004 to 01.06.2007 was to be allowed as assessee had made out a prima facie case that it had entered into works contract which became exigible to tax only w.e.f. 01.06.2007. further held that - since for subsequent period assessee had not shown that it was not engaged in constructing residential complex consisting of more than 12 residential unit or even if it was to be held that it was engaged in construction of residential complex such complex was intended for personal use as 'residence', no prima facie case made out by assessee, and therefore, it was directed to pre-deposit demand for that period. Issues: Application for waiver of predeposit of service tax and interest for the period 10-9-2004 to 1-6-2007 under 'Commercial or Industrial Construction Services'.In the judgment delivered by the Appellate Tribunal CESTAT, CHENNAI, the issue of waiver of predeposit of service tax and interest for the period 10-9-2004 to 1-6-2007 under the category of 'Commercial or Industrial Construction Services' was considered. The Tribunal allowed the application for waiver as the applicants demonstrated a prima facie case that they had entered into works contracts subject to taxation only from 1-6-2007. This decision was based on precedents set by the Tribunal in cases like Build Craft Interior (P.) Ltd. v. CST and Ocen Interiors (P.) Ltd. v. CST. However, for the subsequent period, the applicants failed to establish a prima facie case for waiver. It was noted that the applicants were not engaged in constructing residential complexes with more than 12 units, and even if they were, the construction was intended for personal use by the Central Government and Defence department, thus falling outside the definition of a 'residential complex.' The total demand for the post-1-6-2007 period was estimated to be around Rs. 28 lakhs, and the Tribunal directed a pre-deposit of this amount within 8 weeks. Upon compliance with this direction, the pre-deposit of the remaining tax, interest, and penalty would be waived, and the recovery stayed during the appeal process. Failure to adhere to this directive would result in the vacation of the stay and dismissal of the appeal without prior notice.