1. The appellant is required to pre-deposit service tax amount of Rs. 8,03,405/- and penalty of Rs. 9,34,635/- apart from penalty of Rs. 100/- per every day of default till the payment of service tax demanded under Section 76 of the Finance Act, 1994. The appellants were carrying on activity of manufacturing and sale including erection of the elevators/lifts under composite contracts with various customers. The Revenue has proceeded to levy of service tax under the category of "erection, commissioning and installation and maintenance or repair services under a contract or agreement in respect of elevators/lifts.
The ground taken by the appellants is that they entered into a composite contract and they were paying the service tax in respect of maintenance and repair services and the separate levy of service cannot be computed on the activity of erection, commissioning and installation. Their plea is that what was the amount due to the service tax has been paid for maintenance and repair services and the same has been appropriated in the order. The learned Counsel relies on a large number of judgments of the Apex Court and the Tribunal. He also refers to the Apex Court judgment rendered in the case of Kone Elevators (India) Ltd. 2005 (140) STC 22 (S.C.) wherein in an identical issue, the Apex Court has ruled that the activity was a "sale" of lift and not a "Works Contract". He also relies on the ruling rendered by the Tribunal in the case of Turbo-tech Precision Engineer P. Ltd. v. CCE 2006 (3) S.T.R. 765 (T-Bang.) wherein it has been held that a "Works Contract" cannot be vivisected to levy service tax on different activities. Therefore he prays for full waiver of pre-deposit of the amounts in the light of the cited judgments.
2. The learned JDR distinguishes the judgments cited by the Counsel and submits that the Department has correctly quantified the service tax and the appellants should pre-deposit the amount.
3. On a careful perusal of the Contract, we notice that the composite charges were levied on the appellants for all the activities. They had paid the service tax for the maintenance and repair services. The Apex Court in the case of Kone Elevators (India) Ltd. (supra) has taken a view that the activity is not erection but is a "sale" and it is not "works contract". The learned Counsel also relied on the Tribunal judgment rendered in the case of Daelim Industrial Co. Ltd. 2006 (3) S.T.R. 124 (Tri.) : 2003 (155) E.L.T. 457 (T), which has been affirmed by the Apex Court, wherein it has been held that the contract which was primarily basis wherein cannot be considered as consulting contract for levy of service tax. In view of these judgments, we are inclined to take a prima facie case in the assessee's favour. Therefore the stay application is allowed by granting full waiver of pre-deposit of the amount and staying its recovery till the disposal of the appeal. The appeal to come up for hearing in its turn.