2011 (6) TMI 381 - AT - Service Tax

Waiver of pre-deposit - Service tax liability has been fastened under category of Erection, Commissioning or Installation, Maintenance or Repair service, Consulting Engineer, Technical Testing and Analysis & Business Auxiliary Service - Held that - Since the appellant is not challenging the tax liability on these services but only challenging modalities of quantification done by the authority, the appellant should pre-deposit the balance amount of admitted liability along with interest.

Summary

Issues:
Stay petition for waiver of pre-deposit of service tax, interest, and penalties under the Finance Act, 1994.

Analysis:
The appellant filed a stay petition seeking waiver of pre-deposit of service tax, interest, and penalties amounting to Rs.1,00,56,233/-. The appellant admitted a service tax liability of approximately Rs. 69,73,244/- and had already deposited Rs. 42,71,443/-. The appellant claimed eligibility for Cenvat credit of Rs. 2.93 lakhs. The appellant did not challenge the service tax liability but disputed the quantification by the Revenue. The Revenue insisted that the admitted tax liability should be deposited along with interest.

Upon considering the submissions, the Tribunal observed that the service tax liability pertained to various categories such as Erection, Commissioning or Installation, Maintenance or Repair service, Consulting Engineer, Technical Testing and Analysis, and Business Auxiliary Service. Since the appellant did not contest the tax liability but only the quantification methodology, the Tribunal directed the appellant to pre-deposit the balance amount of admitted liability along with interest, minus the amount already paid, within eight weeks. The appellant was instructed to report compliance before the Assistant Registrar. The Tribunal allowed the application for waiver of pre-deposit of the penalty amount, with recovery stayed until the appeal's disposal.

This judgment highlights the importance of pre-deposit in stay petitions concerning service tax, interest, and penalties under the Finance Act, 1994. It underscores the need for appellants to comply with pre-deposit requirements while challenging the quantification of tax liability by the Revenue. The Tribunal's decision to allow waiver of pre-deposit for penalties, subject to compliance with the pre-deposit of admitted liability, showcases a balanced approach in addressing the appellant's concerns while ensuring adherence to legal procedures.