2015 (10) TMI 2548 - AT - Service Tax

Waiver of pre-deposit - waiver of penalties u/s 78 and penalties under other provisions of Finance Act, 1994 - scope of works contract service - Held that - the Service Tax on works contract service has been levied w.e.f. 01.06.2007 wherein the scope and meaning of works contract has been defined under the Finance Act, 1994. Therefore, there is no necessity to look into the other Acts for the definition of works contract . Quantification - Repair and maintenance services - GTA services - Held that - on computation of demand relating to repair and maintenance services and GTA services the dispute would be resolved at the time of disposal of the appeal. At this stage we are of the opinion that the applicant could not make out a case for total waiver of pre-deposit of dues adjudged. Considering the financial hardship expressed by the ld. C.A. that the company is incurring losses for the last three years and in the interest of Revenue, it would be appropriate to direct the applicant to deposit ₹ 6.00 Lakhs in addition to the amount of ₹ 4.18 Lakhs already deposited. Consequently, the applicant is directed to deposit ₹ 6.00 Lakhs within a period of 8 weeks and on deposit of the said amount, balance dues adjudged would stand waived and its recovery stayed during the pendency of the appeal - stay granted partly.

Summary

Issues:
1. Waiver of pre-deposit of Service Tax and penalties under the Finance Act, 1994.

Analysis:
The appellant sought waiver of pre-deposit of Service Tax amounting to Rs. 1.69 Crores and penalties imposed under section 78 and other provisions of the Finance Act, 1994. The appellant contended that the services provided by them, categorized as 'works contract service', 'repairing and maintenance service', and 'GTA services' from October 2006 to March 2011, did not fall under the scope of 'works contract service' as initially held by the Hon'ble Supreme Court. The appellant had paid Rs. 4.18 Lakhs, including interest, against the disputed amount for the 'repair and maintenance services' and 'GTA services'. The Revenue reiterated the findings of the Commissioner, and the Tribunal observed that the Service Tax on 'works contract service' was levied from 01.06.2007 as defined under the Finance Act, 1994. The Tribunal directed the appellant to deposit an additional Rs. 6.00 Lakhs, in addition to the amount already paid, within eight weeks. Upon compliance, the balance dues adjudged would be waived, and recovery stayed during the appeal's pendency, with a compliance report due on 04.01.2016.

In summary, the Tribunal found that the appellant failed to make a case for a total waiver of pre-deposit of dues adjudged. Despite the appellant's financial hardship and losses incurred over the past three years, the Tribunal considered it appropriate to require a deposit of Rs. 6.00 Lakhs in addition to the amount already paid. Failure to comply with this directive would result in the dismissal of the appeal without further notice.