2011 (5) TMI 557 - AT - Service Tax

Waiver of pre-deposit - Demand has been confirmed under the category of Business Auxiliary Services for paying commission to foreign agents for procuring orders - Held that - The entire amount of Service Tax and the interest thereof has been deposited by the assessee after issuance of show cause notice and hence, provisions of Section 73 could not be invoked by the lower authorities and no penalty should have been imposed on them - Decided in favour of assessee.

Summary

Issues:
1. Waiver of pre-deposit of Service Tax, interest, and penalties under various sections of the Finance Act, 1994.

Analysis:
The appellant filed a stay petition seeking waiver of pre-deposit of Service Tax, interest, and penalties. The demand was confirmed by the Adjudicating Authority and upheld by the Commissioner (A) under 'Business Auxiliary Services' for commission payment to foreign agents. The appellant contended that they had already deposited the entire Service Tax and interest after receiving the show cause notice, arguing that Section 73 should not have been invoked, and no penalty should have been imposed. They also claimed eligibility for cenvat credit on the services. After hearing both parties and examining the records, the Tribunal noted that the appellant had indeed deposited the entire Service Tax and interest before adjudication, deeming it sufficient for the appeal process. Consequently, the Tribunal allowed the application for waiver of pre-deposit of penalties and stayed their recovery until the appeal's final disposal.

This judgment highlights the importance of timely deposits in tax matters and the impact it can have on penalty imposition. The Tribunal's decision to consider the pre-deposit as sufficient for appeal proceedings showcases a balanced approach to the issue raised by the appellant. The ruling provides clarity on the application of Section 73 and the Tribunal's discretion in granting waivers based on the facts and circumstances of each case.