RAJ FURNITURES Vs. COMMISSIONER OF SERVICE TAX, DELHI

JUDGEMENT

(1.) This appeal is directed against an order of the Customs, Excise and Service Tax Appellate Tribunal, (CESTAT) dated 26.08.2014 in Service Tax Stay Application 5179/2012 & ST/S/58880 of 2013, Service Tax Appeal No.4075 of 2012 and 58235/2013. It is urged that the direction to deposit Rs. 60 lakhs with proportionate interest as a pre-condition for hearing the appeal gravely prejudices the appellant.

(2.) The appellant is a service provider in construction contracts. It is contended that in respect of the contracts in question for the period April, 2007 to March, 2009, only 20% of the value of the construction contracts denoted the service components. The appellant's contention was that the amounts deposited by it were in excess of this proportion and rather amounted to almost 33% of the total value of the contract and consequently it could not be assessed to service tax. The appellant relied upon the decision in G.D. Builders v. Union of India & Anr., 2013 32 STR 673 (Delhi) while dealing with the Notification No.1/2006 ST dated 1.3.2006. The respondent, on the other hand, had contended that the claim had not been made in terms of the mandate under Notification No.12/2003 and consequently there was justification in its action to recover the amounts. The assessee's appeal against the order of the adjudicating officer pursuant to the show cause notice resulted in the impugned order directing deposit of Rs. 60 lakhs.

(3.) Having considered the entire circumstances, this Court is of the opinion that prima facie the appellant's submission that 20% of the gross receipts of the work orders relates to service components, is the subject matter of the merits of the appeal. In these circumstances, the direction to deposit Rs. 60 lakhs, based on the adjudication order that abatement of 67% of the amount under the Notification No.1/2006 ST was not available, itself requires to be gone into. In these circumstances, the direction to pay Rs. 60 lakhs with proportionate interest is hereby modified; instead, the appellant shall deposit Rs. 20 lakhs as a pre-condition for hearing of its appeal. The said amounts shall be paid within six weeks from today.