2009 (7) TMI 820 - AT - Service Tax

Waiver of pre-deposit Service tax demand - reduced to the extent of Rs. 1.40 crores in view of appropriation of an amount of Rs. 70.00 lakhs - reduced is entitled to the benefit of cum-duty Held that - waive the balance demand during pendency of the appeal - pre-deposit waived

Summary

Issues:
1. Reduction of service tax demand in view of appropriation of amount.
2. Request for stay of balance demand during pendency of appeal.
3. Dispute regarding cum-duty benefit claimed by the appellant.

Analysis:

1. The appellant submitted that there was a service tax demand of Rs. 2,15,40,896/-, which was reduced to approximately Rs. 1.25 crores after an amount of Rs. 70.00 lakhs was appropriated against the demand. The appellant argued that this reduced figure should be entitled to the benefit of cum-duty. The learned AR highlighted the cooperation of the appellant in reducing the dispute, as evidenced by the deposit of Rs. 13 lakhs at the post-demand stage. The appellant requested the stay of the realization of the balance demand of Rs. 1.12 crores during the appeal to prevent undue hardship.

2. The Joint CDR contended that the adjudicating authority had already granted the cum-duty benefit, and therefore, the appellant should not receive the same benefit again. It was mentioned that the appellant had claimed undue credit, as shown in Para 16 of the submissions. After hearing both sides, the Tribunal acknowledged the reduction of the demand to Rs. 1.12 crores due to the appellant's cooperation. Consequently, the Tribunal decided to waive the balance demand during the appeal process, emphasizing that this decision was made after considering the principles established in the case of Ravi Gupta v. CST, Delhi.

3. The Tribunal's decision to waive the balance demand during the appeal was based on the appellant's cooperation in reducing the disputed amount. The Tribunal clarified that the stay application was not decided hastily but was made in accordance with established legal principles. By considering the cooperation of the appellant and the precedent set in a relevant case, the Tribunal ensured that undue hardship to the appellant was avoided during the appeal process.