2011 (7) TMI 942 - AT - Service Tax

Waiver of pre-deposit - Time limitation - Revenue wants to add the value of free supply of material into the assessable value of service - the impugned order whereby the demand confirmed on the same issue, i.e., by adding the value of the free supplied material, to assessable value, the appeal is pending in the Tribunal and the Tribunal had already granted stay of the recovery and as applicants were under belief that on the same issue, stay has been granted for dues - The appeal is disposed of by way of remand

Summary

Issues:
- Application for waiver of pre-deposit of service tax and penalties
- Dismissal of appeal by Commissioner (Appeals) on grounds of limitation
- Condonation of Delay (COD) application
- Adding value of free supply of material into assessable value of service
- Belief of appellants regarding stay granted by Tribunal on similar issue

Analysis:
1. The applicant filed an application seeking waiver of pre-deposit of service tax amounting to Rs. 34,01,181/- and penalties. The demand was confirmed due to the inclusion of the value of free supply of material in the assessable value of service provided by the applicant. The Commissioner (Appeals) dismissed the appeal citing limitation issues.

2. The applicant contended that the appeal was filed within the condonable period as per Section 85 of the Finance Act. They explained the delay by stating that a previous appeal against a similar demand was pending before the Tribunal, where a stay order had been granted on the pre-deposit of service tax and penalties. Based on advice from consultants, the appellants believed there was no need to file a separate appeal for the current demand. Consequently, they argued that the rejection of the appeal as time-barred was unjustified.

3. The Learned SDR supported the Commissioner (Appeals)'s decision, claiming that the delay was inadequately explained, justifying the dismissal of the appeal.

4. The Tribunal noted that an appeal against a similar demand was already pending, with a stay order granted by the Tribunal on the pre-deposit of dues. Considering this, the Tribunal found the rejection of the appeal on grounds of limitation unsustainable. The Tribunal set aside the order, waived the pre-deposit of dues, and remanded the matter to the Commissioner (Appeals) for a decision on the merits without insisting on a pre-deposit, as the Tribunal had already granted a waiver on the same issue. The Commissioner (Appeals) was directed to hear the appellant and decide the appeal accordingly. The appeal was disposed of through remand, and the stay petition was also resolved accordingly.