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Issues involved: Stay petition for waiver of pre-deposit of Service Tax liability, interest, and penalties under Sections 77 & 78 of the Finance Act, 1944 based on eligibility of Notification No. 8/2005-S.T.
Summary: Issue 1: Eligibility for benefit of Notification No. 8/2005-S.T. The stay petition was filed for the waiver of pre-deposit of an amount as Service Tax liability, interest, and penalties under Sections 77 & 78 of the Finance Act, 1944. The tax liability, interest, and penalties were confirmed as dues by the adjudicating authority and upheld by the first appellate authority due to the appellant availing ineligible benefit of Notification No. 8/2005-S.T., dated 1-3-2005. The appellant processed goods on behalf of EOUs and claimed the benefit of the said notification, which was denied on the grounds of ineligibility. The Notification No. 8/2005 is a conditional exemption for services rendered for goods produced on behalf of the client, and the appellant was found to be producing goods on behalf of EOUs, making them eligible for the benefit of the notification. The appellant discharged service tax liability on goods manufactured and cleared by them on behalf of their client in the Domestic Area. Therefore, the application for waiver of pre-deposit was allowed, and recovery was stayed till the disposal of the appeal. (Order dictated and pronounced in open Court)
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