2008 (12) TMI 653 - AT - Service Tax

CENVAT credit - GTA services - Notification No.36/2004-S.T. - pre-deposit - stay/dispensation of pre-deposit

Summary

Issues: Application for waiver of pre-deposit and stay of recovery of service tax, interest, and penalties under the Finance Act.

Analysis:
1. Issue of Tax Liability and Double Taxation: The case involved an application for waiver of pre-deposit and stay of recovery of service tax, interest, and penalties imposed on the appellants. The appellants, a factory registered under the Factories Act, availed GTA service during a specific period but did not pay the service tax due. They argued that the tax had already been paid by the GTA service providers, and paying again would lead to double taxation. The Commissioner (Appeals) found the appellants liable to pay service tax and sustained penalties for suppressing their tax liability.

2. Contentions and Submissions: The appellants contended that the GTA service providers had already paid the tax under a specific notification, and they had not taken CENVAT credit for the tax paid. They argued that demanding tax from them again was not sustainable as they had a bona fide belief that the tax was not due. The appellants requested a waiver of pre-deposit based on these grounds.

3. Legal Analysis and Decision: The Tribunal considered the submissions from both parties and examined the documents provided by the appellants, including lorry receipts and consignment notes. These documents indicated that the GTA service providers had not availed CENVAT credit, suggesting that the tax had been paid. The Tribunal acknowledged the argument that once the tax had been collected from the GTA, demanding it again from the recipients might not be justified. Considering the prima facie case made by the appellants and their belief that the tax was already paid, the Tribunal waived the pre-deposit and stayed the recovery of dues pending further examination of legal aspects.

4. Final Order and Conditions: The Tribunal granted the waiver and stay of recovery but set a condition for the appellants to provide a certificate confirming that they had not taken the service tax paid for the involved service from the jurisdictional Range Superintendent by a specified date. Failure to comply would result in the withdrawal of the waiver and stay. The matter was scheduled for further mention on a specific date for compliance.

This detailed analysis highlights the legal arguments, considerations, and the Tribunal's decision regarding the waiver of pre-deposit and stay of recovery of service tax, interest, and penalties in the case.