2012 (6) TMI 93 - AT - Service Tax

Waiver of pre-deposit - adjustment of excess payment of service tax when the appeal is pending before Tribunal and stay has been granted - Held that - appellant submitted that the issue as to whether the appellant was liable to pay Rs. 9,11,520/- during the year 2006-07 is before the Tribunal and stay against the recovery of the same has already been granted, matter is pending before the Tribunal and stay has been granted, it cannot be said that this amount has been confirmed, proper procedure to be followed would have been to wait for the outcome of the appeal filed by the appellant and pending before the Tribunal and before reaching the conclusion that the adjustment of Rs. 4,82,768/- was wrong, waiver is granted and stay against the recovery of the dues is also granted during the pendency of the appeal

Summary

Issues:
1. Recovery of Rs. 9,11,520/- against the appellant.
2. Correctness of the adjustment made by the appellant of Rs. 4,82,768/-.
3. Grant of stay against recovery during pendency of appeal.

Analysis:

1. The proceedings were initiated against the appellant for the recovery of Rs. 9,11,520/-, leading to an Order-in-Original confirming the same. The appellant filed an appeal against this decision. The Tribunal allowed the request for stay, considering the demand from 2003-04 onwards, including the amount in question.

2. In April 2007, the appellant adjusted Rs. 4,82,768/- as excess payment made by them during 2006-07 towards service tax. The Department contended that this adjustment was incorrect due to a separate proceeding for recovery of Rs. 9,11,520/-, already confirmed. The proceedings resulted in the confirmation of demand for Rs. 4,82,768/- with interest.

3. The appellant's counsel argued that since the issue of liability for Rs. 9,11,520/- was pending before the Tribunal with a granted stay, the Department's objection to the adjustment was premature. The Tribunal agreed that the proceedings and order were premature, considering the pending appeal. Therefore, the Tribunal granted a waiver of pre-deposit and stay against recovery during the appeal's pendency, listing the appeal with another related case.

In conclusion, the Tribunal found the Department's actions premature and granted the appellant's request for waiver and stay against recovery during the appeal process, emphasizing the need to await the appeal's outcome before concluding on the correctness of the adjustment made by the appellant.