By TIOL News Service

MUMBAI, SEPT 10, 2013: THE appellant under took a bundle of services such as cleaning services, commercial construction services, manpower recruitment and supply services, repair and maintenance services, erection, commissioning and installation services and supply of tangible goods for use services during April, 2005 to Nov, 2008. However, they did not get themselves registered with the Service Tax department and discharged the Service Tax liability.

So, they were issued a SCN proposing to classify the services rendered by them under the various categories mentioned above and demanding Service Tax of Rs. 95,37,908/- along with interest thereon and also proposing to impose penalties. However, during the investigation stage, the appellant worked out the liability and paid a sum of Rs. 34,41,601/- towards Service Tax.

The notice was adjudicated by the CCE, Raigad and demand was confirmed along with interest and by imposing penalties.

Aggrieved by the same, the appellant is before the CESTAT.

It is submitted that the demand has been confirmed without taking into account the pleadings of the appellant at the time of investigation as also before the adjudicating authority; that in respect of the fabrication of tanks at site, the activity amounts to manufacture, therefore, they are not liable to pay Service Tax in respect of the same; that they have supplied various tangible goods for use and Service Tax liability on this activity came into the tax net w.e.f. 16.5.2008; similarly, in a number of services, the Service Tax demands have been confirmed for the services prior to the inception of the levy.

The Revenue representative submitted that no documentary evidence was produced by the appellant in support of their claim that they supplied tangible goods for use during the impugned period; as regards the fabrication of tanks at site, the activity does not qualify as ‘manufacture' inasmuch as immovable property came into existence.

The Bench observed -

"5. After hearing both sides, we notice that as far as the fabrication or erection of tank at site is concerned, the activity brings into existence and immovable property. Therefore, it cannot be said that the appellant has undertaken any manufacturing activity defined under Section 2(f) of the Central Excise Act, 1944. Therefore, the activity undertaken by the appellant would qualify as erection, commissioning and installation services. According to the appellant, the liability would come to Rs. 10 lakhs. As regards other activities, we notice that the matter needs to be gone into detail which can be done at the time of final hearing of the appeal…."

Noting that the interim stage the appellant had not made out a case for complete waiver of pre-deposit of the adjudged dues, they were directed to make a pre-deposit Rs.10 lakhs and report compliance for obtaining Stay.

(See 2013-TIOL-1338-CESTAT-MUM)