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2004 (10) TMI 4 - AT - Service TaxService Tax Contract for training and for commissioning and erection Stay/Dispensation of pre-deposit of service tax
Issues:
Applications for waiver of pre-deposit of service tax and penalties under various sections arising out of the order of Commissioner (Appeals). Analysis: The judgment pertains to applications for waiver of pre-deposit of service tax amounting to Rs. 28,63,205/- and penalties under Sections 76, 78, 75A, and 77 of the Finance Act, along with a penalty of Rs. 10.00 lakhs on the Manager of the applicant-company. The service tax liability was confirmed for services rendered by the applicant company in two separate agreements - one for training and the other for commissioning and erection. The Commissioner (Appeals) had directed the appellants to pre-deposit the entire service tax within two weeks from the receipt of the order, failing which the appeals would be dismissed. Upon hearing both sides, the Tribunal found that the entire demand exceeded the proposed recovery amount mentioned in the notice. The Tribunal acknowledged the applicant's plea regarding a duplication of duty amounting to Rs. 37.20 lakhs and estimated their maximum liability to be Rs. 7.91 lakhs, which the lower authority had not determined. The applicant argued that one of the agreements was for erection and commissioning assistance, which, as per Circular No. 79/9/2004-S.T., would reduce the service tax liability to approximately Rs. 1.50 lakhs. However, the Tribunal noted the absence of a clear break-up of the liability under each agreement, making it unable to ascertain the exact maximum liability. Consequently, the Tribunal directed the pre-deposit of Rs. 2.00 lakhs within four weeks from the date of the order. Upon such deposit, the pre-deposit of the remaining service tax and penalties would be waived, and the recovery thereof stayed pending appeals. Failure to comply with this direction would lead to the vacation of stay and dismissal of appeals without prior notice. Compliance was to be reported by a specified date, and if the order was duly followed, the appeals could be finalized on that date.
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