NATVAR CONSTRUCTION CO Vs. UNION OF INDIA

JUDGEMENT

(1.) By way of this petition under article 226 of the Constitution of India, the petitioner herein--original appellant has prayed for an appropriate writ, direction and order quashing and setting aside the impugned Order No. M/14706/WZB/AHD/2013 dated October 3, 2013 passed by the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as "the CESTAT"), by which, the learned CESTAT has directed the petitioner to deposit a sum of Rs. 25 lacs only as pre-deposit against the total demand of Rs. 2,89,82,752. The petitioner was issued with a show-cause notice dated October 19, 2012 by the Commissioner, Central Excise, Customs and Service Tax, Surat-I, demanding service tax of Rs. 2,89,82,752 under taxable service provided under the category of works contract service. That after adjudication of the said show-cause notice, vide order in original dated February 28, 2013, the Commissioner confirmed the demand of service tax of Rs. 2,89,82,752 along with interest and penalty of like amount.

(2.) Feeling aggrieved and dissatisfied with the order in original passed by the Commissioner, the petitioner preferred an appeal before the learned CESTAT. In the said appeal, the petitioner submitted an application/stay application and prayed for waiver of pre-deposit. It was mainly contended on behalf of the petitioner that they have constructed the houses for the houses for Gujarat State Police Housing Corporation Ltd. and Surat Municipal Corporation. It was submitted that majority of the demand is for construction under Jawaharlal Nehru National Urban Renewal Mission and as per the guidelines issued by the Government of India, Ministry of Urban Development, only urban local body can levy and recover reasonable user charges with an objective to recover full cost of operation and maintenance or recurring cost and that the houses are not sold to the ultimate occupier and therefore, they are not liable to pay the service tax on the same. The petitioner relied upon the stay order granted by the learned CESTAT in the case of M/s. Khurana Engineering Ltd. where stay on similar construction for M/s. Gujarat State Police Housing Corporation Ltd. was given regarding service tax on construction of houses for economically weaker section of the society. That by the impugned order, the learned CESTAT has held that so far as service tax liability on the petitioner for providing services to M/s. Gujarat State Police Housing Corporation Ltd. is concerned, the petitioner has made out a case for waiver of service tax demand of Rs. 53,06,046 and with respect to the balance demand/service tax duty liability, the learned CESTAT has directed the petitioner to deposit a sum of Rs. 25 lakh as pre-deposit and on such deposit there will be no recoveries of the balance amount and penalties till the disposal of the said appeal.

(3.) Feeling aggrieved and dissatisfied with the impugned order passed by the learned CESTAT directing the petitioner to make deposit of Rs. 25 lakh as pre-deposit, the petitioner has preferred the present special civil application.