2012 (8) TMI 134 - AT - Service Tax

Waiver of pre-deposit demand of service tax - appellant has entered into an agreement with HPC Ltd for supply of labour for running the retail outlet under COCO Scheme Held that - Services provided by the appellants are in terms of labour contract services entered by them with HPC Ltd - services cannot be held to be falling under business auxiliary service waiver of pre-deposit allowed - Matter remand to Commissioner (Appeals)

Summary

Issues: Delay in filing appeal, Compliance with stay order, Merits of the case

The judgment by the Appellate Tribunal CESTAT, New Delhi, involved several key issues. Firstly, there was a delay of 24 days in filing the appeal, attributed to the appellant's counsel falling ill. The tribunal, considering the explanation, condoned the delay. Secondly, the Commissioner (Appeals) had dismissed the appeal due to non-compliance with a stay order, directing the appellant to deposit the entire service tax amount confirmed against them. Lastly, the merits of the case revolved around the nature of services provided by the appellant to HPC Ltd for running a retail outlet under the COCO Scheme, with the revenue department asserting the services to be "business auxiliary service."

Regarding the delay in filing the appeal, the tribunal acknowledged the reason provided by the appellant's counsel for the delay and exercised discretion to condone the delay of 24 days. This decision was based on the principle of reasonableness and fairness, considering the circumstances leading to the delay.

On the issue of compliance with the stay order, the Commissioner (Appeals) had dismissed the appeal for non-compliance with the order to deposit the service tax amount. However, the tribunal, after examining the merits of the case, found that the services provided by the appellant under a labor contract with HPC Ltd may not fall under the category of business auxiliary service. As a result, the tribunal dispensed with the requirement of pre-deposit of tax and penalty, indicating a prima facie case in favor of the appellant on the merits of the services provided.

In light of the Commissioner (Appeals) not deciding the case on merits, the tribunal set aside the impugned order and remanded the matter for a decision on merits without insisting on any pre-deposit. This decision aimed to ensure a fair consideration of the case based on its substantive merits rather than procedural compliance. The tribunal disposed of the COD application, Stay petition, and appeal in the above manner, providing a comprehensive resolution to the issues raised in the appeal.