2009 (12) TMI 530 - AT - Service Tax

Waiver of pre-deposit of Service tax - Demand of Service tax and penalty - G.T.A. Service - observing the credit of Service tax paid on outward G.T.A. Service - Held that - No financial hardship is pleaded in the Stay Application - not a fit case for waiver of pre-deposit of Service tax - it is not a fit case for waiver of pre-deposit of Service tax - Applicants are directed to deposit an amount of Service tax - On deposit of the amount the pre-deposit of amount of penalty is waived and recovery of the same is stayed during pendency of the Appeal - Appeal is disposed of accordingly

Summary

Issues:
1. Confirmation of demand of Service tax and imposition of penalties.
2. Reliance on legal precedents.
3. Plea of limitation.
4. Separate charges for freight and insurance.
5. Applicability of legal precedents on the case.
6. Decision on waiver of pre-deposit of Service tax.

Analysis:
1. The judgment involved the confirmation of a demand for Service tax amounting to Rs. 81,830 with imposed penalties. The demand was based on the observation of the credit of Service tax paid on outward G.T.A. Service.

2. The Applicants in this case relied on legal precedents, specifically citing the decision of the Hon'ble Punjab & Haryana High Court in the case of Gujarat Ambuja Cements Ltd. and a Larger Bench decision of the Tribunal in the case of ABB Ltd. These legal references were made to support their case.

3. The Applicants also raised a plea of limitation, arguing that the demand was time-barred as they regularly filed necessary returns showing the credit of Service tax. However, the Revenue contended that the monthly returns did not indicate the credit availed in respect of Service tax paid on outward G.T.A. Service.

4. A crucial point of contention was the separate charges for freight and insurance, which were found to be charged separately and not considered part of the price of excisable goods. This fact distinguished the present case from the legal precedent cited by the Applicants.

5. The judgment analyzed the applicability of the legal precedents on the case, highlighting that the decision of the Hon'ble Punjab & Haryana High Court in the Gujarat Ambuja case allowed the credit of Service tax paid on outward G.T.A. Service based on specific conditions, including freight charges being integral as part of excisable goods.

6. Finally, a decision was made regarding the waiver of pre-deposit of Service tax. It was determined that the case did not warrant a waiver of pre-deposit, and the Applicants were directed to deposit the Service tax amount within a specified period. Upon deposit, the pre-deposit of the penalty amount was waived, and the recovery of the penalty was stayed during the pendency of the Appeal, with a follow-up scheduled for compliance assessment.