2010 (6) TMI 385 - AT - Service Tax

Waiver of pre-deposit demand - appellant has admitted taxable income as per survey proceedings before the Income Tax authorities - Revenue authorities have not adduced any evidence to show that amount received by the appellant towards advertisement service rendered - appellant has made out a prima facie case for waiver of pre-deposit

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax, interest, and penalties.
2. Allegation of suppressing value for service tax purposes.
3. Reliance on income admitted in survey proceedings before Income Tax authorities.
4. Lack of evidence from Revenue authorities to support the demand.

Analysis:
The case involved a stay petition seeking a waiver of pre-deposit of Service Tax, interest, and penalties totaling a significant amount. The department alleged that the appellant had suppressed the value for service tax purposes by one crore rupees, based on income admitted during survey proceedings before the Income Tax authorities but not disclosed to the Service Tax authorities. The appellant's counsel argued that the case was solely based on the income admitted during the survey proceedings due to unsupported expenditure, with no evidence presented by the Revenue to demonstrate that the amount was received for services rendered. The Revenue authorities, however, reiterated their findings without providing substantial evidence to support their claim.

Upon reviewing the submissions and records, the Tribunal found that both authorities had relied on the appellant's admission of one crore rupees as income during the Income Tax survey proceedings to confirm the demand. However, upon examining the Income Tax assessment order, it was revealed that the taxable income was increased due to disallowed capital expenditure and depreciation adjustments. The Tribunal agreed with the appellant's counsel that there was a lack of evidence from the Revenue authorities to prove that the one crore rupees were received for advertisement services. Consequently, the Tribunal concluded that the appellant had established a prima facie case for the waiver of pre-deposit. As a result, the application for the waiver of pre-deposit was granted, and the recovery of the amount was stayed pending the appeal's disposal.