2011 (5) TMI 387 - AT - Service Tax

Waiver of pre-deposit - The bare perusal of the show cause notice, it is seen that the appellant was registered with the authorities on 15/3/04 for discharge of service tax liability - It is also seen that the allegations in the show cause notice regarding the suppression of the facts of rendering of the services and receiving the amount from the clients are very sketchy one - Held that appellant has made out a prima facie case for the waiver of the pre-deposit of the amount involved - application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of the appeal

Summary

Issues: Stay application for waiver of pre-deposit of service tax, interest, and penalties.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue at hand was a stay application filed for the waiver of the pre-deposit amounting to Service Tax, Interest, and various Penalties under different sections of the Act. The demand and penalties were confirmed by the Adjudicating Authority and upheld by the Commissioner (Appeals) due to the appellant's alleged failure to discharge correct service tax liability for the period April 2001 to March 2003. However, upon reviewing the case, the Tribunal noted that the show cause notice raising the demand was issued after the appellant had already registered with the authorities for service tax liability. The differential demand arose from an audit objection raised in 2005, and the allegations of suppression of facts were deemed sketchy. The Tribunal found that the appellant had made a prima facie case for the waiver of the pre-deposit, citing a judgment from a coordinate bench in a similar case. As a result, the application for the waiver of pre-deposit was allowed, and recovery was stayed until the appeal's disposal. The decision was pronounced in open court by the Tribunal.

This judgment highlights the importance of establishing a prima facie case for the waiver of pre-deposit in matters concerning service tax liabilities and penalties. It emphasizes the need for a thorough review of the facts and circumstances surrounding the alleged defaults, especially in cases where audit objections play a significant role in the demand raised. The reference to a previous judgment from a coordinate bench underscores the consistency in the Tribunal's approach to similar cases, providing a basis for decisions on waiver applications. Overall, the judgment serves as a reminder of the procedural and substantive requirements for granting relief in tax matters, balancing the interests of the appellant with the revenue considerations of the authorities.