2011 (10) TMI 225 - AT - Service Tax

Demand - Appellant contended - Notification No. 6/2005-ST - Entitled to small scale exemption - consideration received should be treated as cum-tax value and the duty liability to be re-worked - Held - We direct the appellant to make a pre-deposit of differential Rs. 73,000/- within four weeks and report compliance thereafter the plea of the appellant will be considered.

Summary

Issues:
1. Failure to register for service tax and discharge tax liability.
2. Dispute over the correct tax liability and small scale exemption eligibility.
3. Requirement for pre-deposit before remand and re-computation of duty liability.

Analysis:
1. The case involves an appeal against an order passed by the Commissioner of Central Excise & Customs regarding a service provider who failed to register for service tax and discharge tax liability despite receiving payments for catering services. A show cause notice was issued for recovery of service tax, interest, and penalties under relevant sections of the Finance Act, 1994. The appellant contested the order, leading to the appeal before the Tribunal.

2. The appellant argued that they had deposited an amount against the demand but disputed the correctness of the tax liability. They claimed eligibility for a small scale exemption and contended that since they did not collect service tax from customers, the entire consideration received should be treated as cum-tax value. The Tribunal considered these submissions and directed the appellant to make a pre-deposit before the case could be remanded. The Tribunal also instructed the adjudicating authority to review the small scale exemption eligibility and re-quantify the service tax if the appellant had not collected tax from customers.

3. The Tribunal, after considering the rival submissions, found it reasonable to require a pre-deposit from the appellant before remanding the case. The appellant was directed to make a pre-deposit within a specified timeframe. Upon compliance, the adjudicating authority was tasked with reassessing the small scale exemption eligibility and re-quantifying the service tax if necessary. The Tribunal allowed the appeal by way of remand, emphasizing that the appellant should be given a fair opportunity to present evidence and arguments in support of their claim during the proceedings.