2012 (5) TMI 423 - AT - Service Tax

Waiver of pre-deposit - applicant is providing business auxiliary service by selling the readymade garments on behalf of manufacturer - applicant had already paid service tax of Rs. 9, 000/- on the commission received. Revenue confirmed the demand by adding amount reimbursed by the principal to the assessable value of service - On financial hardship applicant submitted that applicant is a small assessee Held that - amount already deposited is sufficient for hearing. Therefore pre-deposit of remaining amount of service tax and penalties are waived and recovery is stayed during pendency of the appeal. matter is remanded to the Commissioner(Appeals). Appeal is disposed of by way of remand.

Summary

Issues involved:
1. Waiver of pre-deposit of service tax amount.
2. Interpretation of provisions regarding abetment of reimbursement in service tax.
3. Financial hardship of the appellant.
4. Dismissal of appeal by Commissioner(Appeals) for non-compliance of provisions.

Analysis:

1. The appellant sought a waiver of pre-deposit of service tax amount of Rs. 2,22,806/- along with interest and penalties. The appellant contended that they provided 'business auxiliary service' by selling garments on behalf of a manufacturer and had already paid service tax on the commission received. The Revenue, however, confirmed the demand by adding the amount reimbursed by the principal to the assessable value of service. The Tribunal noted that the appellant had already deposited a substantial amount, considering their financial hardship, and waived the pre-deposit of the remaining service tax and penalties, staying the recovery during the appeal.

2. The issue of interpretation arose regarding the abetment of reimbursement in service tax. The Tribunal observed that in the absence of specific provisions of law allowing abetment for reimbursable amounts, such abetment was not permissible. The Tribunal emphasized that the appellant had received other amounts besides commission, and based on the lack of legal provisions, the abetment for reimbursable amounts could not be allowed.

3. Considering the financial hardship claimed by the appellant as a small assessee, the Tribunal took into account the amount already deposited by the appellant, which was deemed sufficient for the proceedings. Acknowledging the total demand, the Tribunal found the deposited amount along with the commission paid to be adequate, leading to the waiver of the remaining pre-deposit of service tax and penalties during the appeal process.

4. The Commissioner(Appeals) had dismissed the appeal due to non-compliance with the provisions of section 35F of the Central Excise Act, without delving into the merits of the case. In response, the Tribunal remanded the matter back to the Commissioner(Appeals) to decide the appeal on its merits after verifying the amount deposited by the appellant and providing an opportunity for a hearing. The appeal was disposed of through remand, emphasizing the need for compliance with procedural requirements and a thorough consideration of the case on its merits.