2011 (3) TMI 77 - AT - Service Tax

Waiver of pre deposit - Demand - Rejection of modification application by the Commissioner (Appeals) to the stay order and deciding appeal as such - Held that Matter remanded to Commissioner(Appeals) with direction to decided modification application first - if the appellant is directed to make any pre-deposit within a prescribed period, it shall be duly complied with to enable the appellate authority to take up the appeal for disposal on merits in accordance with law and principles of natural justice - he appeal stands allowed by way of remand

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery in respect of service tax and penalties.
2. Classification of service as management consultancy service or ship management service.
3. Rejection of appeal for want of pre-deposit and on merits simultaneously.

Analysis:
1. The appellant sought waiver of pre-deposit and stay of recovery for service tax and penalties demanded under the Finance Act, 1994. The Tribunal found the case fit for remand after dispensing with pre-deposit, allowing the appeal to be dealt with further.

2. The appeal was against an order demanding service tax and penalties from the appellant for evading tax under management consultancy service. The Commissioner (Appeals) directed pre-deposit, which was not complied with, leading to the rejection of the appeal. The appellate authority classified the service as management consultancy service, not considering the plea for ship management service. The Tribunal found the rejection on both grounds unsustainable in law.

3. The impugned order rejected the appeal for lack of pre-deposit and on merits simultaneously. The Tribunal set aside this order, directing the Commissioner (Appeals) to first dispose of the modification application and then consider the appeal on merits. Any directed pre-deposit should be complied with, not exceeding the earlier interim order amount. The Tribunal allowed the appeal by way of remand for further consideration.

4. The Tribunal refrained from making observations on the service classification issue, leaving it for the lower appellate authority to address during the modification application and appeal consideration. The stay application was disposed of, and the appeal was allowed for remand.