2014 (1) TMI 1761 - AT - Service Tax

Waiver of pe-deposit - petitioner failed to remit the assessed liability of service tax plus 25%, the penalty - under-remittance of service tax - Held that - we are disinclined to grant waiver of pre-deposit in full. We accordingly grant waiver of pre-deposit and stay further proceedings pursuant to the impugned order dated 17-7-2012, on condition that the petitioner remits the entirety of the assessed liability of service tax plus the corresponding interest and 50% of the penalty under Section 78 of the Act in addition to penalty of ₹ 10,000/- assessed under Section 77 of the Act, within 4 weeks from today. - Petition disposed of

Summary

Issues:
1. Confirmation of service tax demand with penalties under Sections 77 and 78 of the Finance Act.
2. Under-disclosure of gross consideration leading to under-remittance of service tax.
3. Failure to remit assessed liability of service tax and penalties.
4. Granting waiver of pre-deposit with specific conditions.

Analysis:
1. The judgment confirms the service tax demand of &8377; 63,47,047/- along with interest and penalties under Sections 77 and 78 of the Finance Act. The adjudication order passed by the C.C.E.&S.T., Hyderabad-II Commissionerate was upheld, with the petitioner's counsel acknowledging the unassailability of the demand and interest as per the impugned order.

2. The petitioner, acting as a franchisee of M/s. APTECH Ltd., provided "Commercial Training or Coaching" services. However, the petitioner under-disclosed the gross consideration received by excluding the 20% royalty paid to M/s. APTECH Ltd. The under-remittance of service tax due to this discrepancy led to substantive proceedings and the eventual impugned order confirming the demand.

3. Despite the adjudication order, the petitioner failed to remit the assessed liability of service tax and penalties. The failure to pay the assessed liability plus 25% penalty under Section 78 of the Act resulted in the decision not to grant a full waiver of pre-deposit. The judgment granted a waiver of pre-deposit with specific conditions, requiring the petitioner to remit the entirety of the assessed liability, interest, 50% of the penalty under Section 78, and an additional penalty of &8377; 10,000 within a specified timeline.

4. The tribunal, disinclined to grant a full waiver of pre-deposit, imposed conditions for granting the waiver and staying further proceedings. The petitioner was given a deadline for compliance, failing which the order of waiver would stand rescinded, and the appeal dismissed. The judgment emphasized the importance of compliance and noted that the presence of the petitioner's counsel in court served as adequate intimation of the obligations under the order, disposing of the application accordingly.