AMBIENCE CONSTRUCTION INDIA LTD. Vs. C.C.E.

JUDGEMENT

(1.) THE stay application seeks waiver of pre -deposit and stay of further proceedings pursuant to the impugned adjudication order dated 30 -3 -2010 passed by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad -II. Service tax, interest and penalties were levied for providing Commercial and Industrial Construction Service, for constructing the Paryatak Bhavan for the Andhra Pradesh Tourism Development Corporation, by the petitioner through the principal contractor M/s. Ramky Infrastructure Ltd. Revenue alleged non -filing of Returns and failure to remit service tax due on the taxable service provided. The adjudication order determined tax liability of Rs. 74,16,923/ -, besides imposing interest under Section 75 of the Finance Act, 1994 and penalties under Sections 77 and 78. Penalty under 76 was eschewed since penalty under Section 78 was imposed. The learned counsel for the appellant has contended that the service provided by the petitioner/appellant to the APTDC is outside the purview of the definition of Commercial and Industrial Construction Service, since construction of the Paryatak Bhavan could not amount to commercial construction or one for industrial purpose within the meaning of the expression as employed in Section 65(25b) of the Act. It is further contended that since the petitioner was under a genuine assumption based on a bona fide belief that Paryatak Bhavan not being a commercial or industrial construction was outside the purview of the taxable service, it failed to file Returns or remit tax on the remuneration received. Therefore there was no justification for invoking the extended period of limitation under the proviso to Section 73(1) of the Act. It was also contended that since VAT is paid for the goods incorporated into the project, levy of service tax is illegal.

(2.) PRIMA facie none of these contentions commend acceptance. Paryatak Bhavan owned and administered by the Andhra Pradesh Tourism Development Corporation does not appear to fall outside the purview of Commercial or Industrial Construction service primarily intended since there is admittedly a commercial activity of a hotel carried on in the premises. The material on record does not reveal that the activities in the Paryatak Bhavan are substantially for noncommercial or non -industrial purposes or are substantially for accommodating official/departmental establishments of the State.

(3.) FOR the nonce we consider it appropriate to grant waiver of pre -deposit and stay of all further proceedings pursuant to the impugned order on condition that the petitioner remits 50% of the assessed tax liability plus the proportionate interest thereon (excluding the components of penalty assessed under Sections 77 and 78 of the Act), within eight weeks from today and report compliance by 30 -9 -2013. In default of the deposit as ordered herein and within the time stipulated, the stay granted hereby shall stand dissolved, forthwith on occurrence of the default, without further reference to the Tribunal. The learned counsel for the appellant is present in the Court, has noted the order and this constitutes sufficient intimation to the petitioner of its obligations under this order. The stay application is disposed of accordingly.