9911796707
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Issues:
1. Stay application against Commissioner (Appeals) order rejecting appeal against Assistant Commissioner's order. 2. Service tax liability under Section 68 of the Finance Act, 1994. 3. Prima facie case on merits for claiming service tax not leviable. 4. Interpretation of Section 73 of the Finance Act, 1994. 5. Recovery of service tax from service availer under Section 71A. 6. Financial hardship plea and balance sheet submission. 7. Dismissal of stay petition and direction for pre-deposit. Analysis: 1. The judgment deals with a stay application challenging the Commissioner (Appeals) order that rejected an appeal against the Assistant Commissioner's order, which directed the appellants to pay a service tax liability of Rs. 4,70,707 under Section 68 of the Finance Act, 1994. 2. The appellants argued that they have a strong prima facie case on merits to claim that the service tax is not leviable. They relied on a Tribunal decision stating that the amended Section 73 of the Finance Act, 1994, does not cover the service availer, but only the service provider. However, the Tribunal noted that the liability is on the service availer under a special deeming provision in the Finance Act, 2003, and the recovery of service tax is authorized through Section 71A. 3. The Tribunal rejected the appellants' argument regarding the non-applicability of Section 73, emphasizing that the recovery of service tax from the appellants is sustainable through Section 71A. The Tribunal highlighted that the demand was issued before the President's assent to the Finance Act, 2003, and the appellants were covered under the charging provisions of the service tax, indicating that they did not establish a prima facie case on merits for a total waiver of the service tax amount. 4. Regarding the financial hardship plea, the appellants submitted a balance sheet showing substantial losses, but the Tribunal noted that the company had significant assets and deposits, which would not constitute financial hardship. Consequently, the Tribunal dismissed the stay petition and directed the appellants to make a pre-deposit of the entire service tax amount within six weeks, failing which the appeal would be dismissed under Section 35F of the Act. 5. In conclusion, the judgment upholds the recovery of service tax from the appellants as service availers, based on the specific provisions of the Finance Act, 2003, and dismisses the stay application due to the lack of a prima facie case on merits and the absence of financial hardship justifying a waiver of the tax amount.
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