2012 (11) TMI 167 - AT - Service Tax

Waiver of pre-deposit - alleged that appellant has not discharged the Service tax liability on job works undertaken by them, is violation of Notification No. 8/2005-S.T. Held that - Appellant for discharge of service tax liability, as a job worker - appellant had produced the certificates issued by the principal manufacturers, wherein it has been indicated that they have discharged the excise duty liability on the products received from the appellant as a job worker - appellant has purchased powder for coating but raised the bills for such purchases of powder to principal manufacturers while raising the bills for job working - appellant has prima facie complied with the conditions of Notification No. 8/2005 - waiver of pre-deposit allowed

Summary

Issues:
Waiver of pre-deposit of service tax, penalties under Sections 77 and 78, compliance with Notification No. 8/2005-S.T.

Analysis:
The case involved two stay petitions seeking the waiver of pre-deposit of service tax amounts, penalties under Sections 77 and 78. The adjudicating authority confirmed the amounts as service tax liability, interest, and penalties due to the alleged non-discharge of service tax liability on job works, a violation of Notification No. 8/2005-S.T. The appellant argued that they had produced certificates from principal manufacturers showing discharge of duty liability, which the adjudicating authority allegedly did not consider properly. The appellant's compliance with the conditions of the Notification was questioned by the SDR, emphasizing the need to obtain raw materials from the principal manufacturer to benefit from the Notification. The SDR also highlighted the lack of certificates from all manufacturers for whom the appellant had done powder coating work.

Upon careful consideration, the issue revolved around the appellant's entitlement to the benefits of Notification No. 8/2005-S.T. for the discharge of service tax liability as a job worker. The appellant had presented certificates from principal manufacturers indicating the discharge of excise duty liability on products received from them. It was noted that the appellant had purchased powder for coating but billed such purchases to principal manufacturers, suggesting compliance with the Notification's conditions. Consequently, the Tribunal found that the appellant had prima facie met the Notification's requirements.

In conclusion, the Tribunal allowed the application for the waiver of pre-deposit of the amounts involved and stayed the recovery until the appeal's disposal. The decision was dictated and pronounced in court.