2012 (3) TMI 268 - AT - Service Tax

Applications for waiver of pre-deposit of total service tax amount, interest and penalties - show cause notices were issued on the ground that the applicants provided rent-a-cab operator service - contention of the applicants is that show cause notice was not received by the applicants and the adjudication order was passed ex-parte and applicants are entitled for small scale exemption Notification No.9/2004-ST dated 9.7.2004 which was not considered while confirming the demand - Held that - in view of the fact that the benefit of small scale exemption notification was not considered at the time of confirming the demands, the applicants are directed to pre-deposit Rs.1 lakh for hearing of the appeals - the matter is remanded to the adjudicating authority after setting aside the impugned orders to pass a fresh order after affording an opportunity of hearing to the appellants and produce evidence before the adjudicating authority within eight weeks from the receipt of the order.

Summary

Issues:
Waiver of pre-deposit of service tax amount, applicability of small scale exemption notification, financial hardship claim, ex-parte adjudication, non-compliance with Section 35F, remand for fresh adjudication.

Waiver of Pre-Deposit of Service Tax Amount:
The applicants sought waiver of pre-deposit of service tax amount, interest, and penalties totaling Rs.5,69,819. Four show cause notices were issued for providing rent-a-cab operator service to M/s IFFCO. The adjudicating authority confirmed the demand, directing partial deposit for appeal hearings. However, the appellants failed to comply, resulting in dismissal for non-compliance with Section 35F. The applicants argued non-receipt of show cause notice and ex-parte adjudication. They claimed entitlement to small scale exemption notification, citing financial hardship due to being a small operator.

Applicability of Small Scale Exemption Notification:
The Revenue contended that the applicants did not claim the small scale exemption before the adjudicating authority. The Revenue discovered the taxable service provision only from M/s IFFCO's records, asserting that the applicants did not disclose this fact. Thus, the Revenue opposed total waiver, arguing against the applicants' claim for exemption and financial hardship.

Ex-Parte Adjudication and Remand for Fresh Adjudication:
The Tribunal noted the ex-parte adjudication and dismissal of appeals for non-compliance. Considering the unconsidered small scale exemption notification and the non-appearance of the applicants before the adjudicating authority, the Tribunal directed a deposit of Rs.1 lakh for appeal hearings, waiving the remaining dues. The matter was remanded to the adjudicating authority for a fresh order after setting aside the impugned orders, providing an opportunity for the appellants to be heard. The applicants were instructed to pre-deposit Rs.1.0 lakh and furnish evidence within eight weeks for de novo adjudication.

This judgment addressed the waiver of pre-deposit of service tax, the applicability of small scale exemption notification, financial hardship claims, ex-parte adjudication, non-compliance with Section 35F, and remand for fresh adjudication. The Tribunal considered the lack of small scale exemption consideration, non-disclosure of taxable service provision, and financial hardship arguments. Ultimately, the Tribunal directed a partial deposit, remanded the matter for fresh adjudication, and instructed compliance with the pre-deposit requirement for further proceedings.