2006 (3) TMI 757 - AT - Service Tax

Summary

Issues:
1. Service Tax demand for the period 16-7-2001 to 31-3-2003 and 1-4-2003 to 30-6-2003.
2. Imposition of penalties under the Finance Act, 1994.
3. Waiver of pre-deposit and stay of recovery for the first period.
4. Plea of limitation for the second demand period.

Analysis:

1. The Appellate Tribunal CESTAT Chennai addressed the issue of Service Tax demand for two periods - 16-7-2001 to 31-3-2003 and 1-4-2003 to 30-6-2003. The lower appellate authority demanded a total of &8377; 7,84,914/- and &8377; 1,31,011/- for these respective periods. The appellants had already deposited &8377; 3 lakhs towards the first demand. The Tribunal granted waiver of pre-deposit and stay of recovery for the first period based on this deposit.

2. In addition to the Service Tax demand, penalties were imposed on the appellants under various provisions of the Finance Act, 1994. The Tribunal considered the penalties along with the tax demands for both periods and decided on the waiver of pre-deposit and stay of recovery accordingly.

3. The issue of waiver of pre-deposit and stay of recovery specifically for the second demand period (1-4-2003 to 30-6-2003) was raised by the appellants' counsel. The counsel argued that the demand for this period was barred by limitation. It was highlighted that the allegations in the second show cause notice were a repetition of those raised in the notice for the first period, indicating that the relevant facts were available with the department earlier. The Tribunal, after hearing the submissions, found the plea of limitation to be forceful and granted waiver of pre-deposit and stay of recovery for the amounts of tax and penalties related to the second period.

4. The Tribunal, consisting of Shri P.G. Chacko and P. Karthikeyan, Members, considered the arguments presented by the appellants' counsel and the SDR. The decision to grant waiver of pre-deposit and stay of recovery for both periods was based on the merits of the case, including the deposit made by the appellants and the plea of limitation raised for the second demand period. The order was dictated and pronounced in open court, concluding the judgment.