2013 (3) TMI 619 - HC - Central Excise

Summary

Issues involved: Assessment of service tax on works contract, appeal for stay of demand notice, recovery notice u/s 87 of Finance Act, 1994.

Assessment of service tax on works contract: The petitioner was assessed by the Assessing Officer for service tax on works contract allotted by ONGC. The assessment was confirmed by a demand notice from the Additional Commissioner of Central Excise and Service Tax. The petitioner appealed against the assessment and applied for stay of the demand notice, which is pending for order.

Appeal for stay of demand notice: The petitioner's appeal against the assessment was heard but no order on granting or refusing to grant stay has been made by the Commissioner of Central Excise and Service Tax. The petitioner expressed concern that ONGC might make payment of the assessed tax before the appeal order, leading to deduction from the petitioner's bill.

Recovery notice u/s 87 of Finance Act, 1994: The petitioner claimed that ONGC received a recovery notice under Section 87 of the Finance Act, 1994, for the assessed service tax, penalty, and interest. The petitioner feared that ONGC would make payment despite the pending appeal.

Court's Decision: The High Court directed that the recovery/demand notice shall remain suspended until the Commissioner (Appeal) passes an order on the stay petition or disposes of the appeal, whichever is earlier. This decision was made in the interest of justice to prevent ONGC from releasing any amount towards payment of service tax before the appeal order. The writ petition was disposed of with these directions.