By TIOL News Service

MUMBAI, SEPT 04, 2014: A service tax demand of Rs.1,02,762/- along with interest and penalties has been confirmed by the adjudicating authority and the same has been upheld by the Commissioner(A).

Against this order, the appellant is before the CESTAT.

The facts are that the appellant is a provider of Construction Services and had claimed abatement in terms of notification 1/2006-ST while making payment of Service Tax. The appellant had also claimed the benefit of small scale exemption under notification 6/2005-ST and which was denied on the ground that during the preceding financial year the value of taxable services rendered had exceeded Rs.10 lakhs.

It is the submission of the appellant that in respect of the construction services undertaken, the abatement is 67% and tax has to be paid on 33% of the value of the services rendered and if the abated value were taken into account, the turnover of the appellant during the preceding financial year did not exceed Rs.10 lakhs. Therefore, during the impugned period, the appellant was eligible for the small scale exemption.

The Revenue representative submitted that these Notifications cannot be clubbed together and for the purpose of granting benefit of notification no. 6/2005-ST, the gross value of the consideration received alone should be taken as the basis. Therefore, it is prayed that the appellant be put to terms.

The Bench observed that if the benefit of the notification 1/2006-ST is not considered while computing the exemption and eligibility limits under notification 6/2005-ST, it would certainly result in taking away the benefit granted under notification 6/2005-ST.

Holding that the appellant has made out a case for grant of stay, the CESTAT granted unconditional waiver of pre deposit of the adjudged dues and stayed the recovery.

(See 2014-TIOL-1672-CESTAT-MUM)