2009 (2) TMI 732 - AT - Service Tax

Summary

Issues:
- Requirement of pre-deposit of Service Tax and interest under Section 75
- Discrepancy in the discharge of Service Tax for gross receipts
- Benefit given by the Department in a previous period
- Evidence of sale of materials to the service receiver
- Prima facie case on merits for waiver of pre-deposit

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore addressed the issue of pre-deposit of Service Tax and interest under Section 75. The Revenue alleged that the applicants had not discharged the Service Tax for the entire amounts of gross receipts. The applicants argued that the demand was related to the cost of materials used in the Repair and Maintenance of Aircrafts. The learned Cost Accountant highlighted that a similar issue had been resolved in a previous period with a benefit given by the Department and an adjudication order passed.

Regarding the evidence of sale of materials to the service receiver, the Revenue proceeded against the applicants in the absence of such evidence. However, the learned Cost Accountant presented copies of invoices indicating the value of materials used in providing the service. The Tribunal found that the applicants had a strong case on merits, leading to the decision to grant a total waiver of the pre-deposit of the dues demanded in the impugned order. Additionally, the Tribunal ordered that no coercive measures should be taken by the Revenue until the appeal is disposed of, with the stay application allowed to continue even after 180 days. The appeal was scheduled for a hearing on 29th May, 2009.