2009 (7) TMI 1080 - AT - Service Tax

Summary

Issues:
1. Entitlement to Notification No. 12/2003 for service tax.
2. Wilful suppression of facts affecting abatement eligibility.

Entitlement to Notification No. 12/2003 for service tax:
The appellant argued that the demand made by the adjudicating authority was based on a cursory examination of the contract/agreement. They claimed that since the materials involved in the work made the work performable, they should be entitled to Notification No. 12/2003, dated 20-6-2003, and should not be denied legitimate dues. The appellant had already paid a significant amount towards the service tax demand, including the cess attributable to service tax. The appellant requested a stay on the realization of the balance demand during the appeal process. The Tribunal observed that a thorough examination of the record was necessary before denying the benefit of the notification. They noted that the reasons for rejecting the appellant's pleadings without a categorical examination of the work orders were not apparent in the impugned order. Considering that the appellant had already made a substantial deposit, the Tribunal directed the appellant to make a further pre-deposit of Rs. 20 lakhs within six weeks and stay the realization of the balance demand during the appeal.

Wilful suppression of facts affecting abatement eligibility:
The Joint CDR contended that the Commissioner (Appeals) had found wilful suppression of facts by the appellant, making them ineligible for the abatement of 67% under the relevant Notification. Therefore, the Joint CDR argued that a pre-deposit of the demand should be made at this stage. After hearing both sides and examining the record, the Tribunal noted the argument made by the appellant's counsel regarding the examination of the record before denying the benefit of the Notification. The Tribunal found that the impugned order lacked a categorical examination of the work orders, and the reasons for rejecting the appellant's pleadings were not evident. Consequently, the Tribunal directed the appellant to make a further pre-deposit but did not find it necessary to require the entire demand to be deposited during the pendency of the appeal.

This judgment highlights the importance of a detailed examination of the record before denying benefits or imposing demands in tax matters. It also showcases the Tribunal's discretion in determining pre-deposit amounts and stays on demand realization during the appeal process based on the facts and circumstances of each case.