2013 (8) TMI 567 - AT - Service Tax

Ad-hoc cargo and Deposit Account - levy of service tax on receipt of advance - stay - Held that - show-cause notice has been issued to the applicant alleging that they have received certain amounts under head Ad-hoc cargo and Deposit Account (Sundry Depositors) etc. for the period from 2008-09 to 2009-10. However, the data adopted in computing the demand was relating to the summary journal for the month of April, 2010. The finding of the ld. Commissioner is that it is a clerical mistake. Prima-facie, we cannot accept such explanation that it is clerical mistake - only the credit side of the journal ledger has been considered and debit side has not been considered. The practice of discharging service tax against the advances had been dis-continued w.e.f. 01.04.2012 and the service tax has been paid by the applicant from that date against the deposit received from the port users. - taking into consideration that there would not be any liability of the applicant as on date as the entire amount of advances collected from the port users had been subjected to service tax and have been paid by them, thus, the applicant could able to make out a prima-facie case for total waiver of predeposit of dues adjudged. - Stay granted

Summary

Issues:
Application for waiver of predeposit of service tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
The appellant, engaged in rendering port services, sought waiver of predeposit of service tax and penalty amounting to Rs.2.01 Crores. The demand was for the period from 2008-09 to 2009-10, alleging non-payment of service tax on amounts received under 'Ad-hoc cargo' and 'Deposit Account (Sundry Depositors)'. The appellant argued that the demand calculation based on data as of 30.04.10 was erroneous and that they had reconciled the amounts with relevant documents. The appellant contended that service tax was discharged against advances received from port users starting from 01.04.2012, eliminating any current liability. The Revenue argued that the appellant failed to provide sufficient evidence for reconciliation, citing Tribunal judgments. The appellant distinguished those judgments as inapplicable to the present case.

The Tribunal observed that the show-cause notice alleged receipt of amounts under 'Ad-hoc cargo' and 'Deposit Account (Sundry Depositors)' for 2008-09 to 2009-10, but the demand calculation was based on April 2010 data, termed a clerical mistake by the Commissioner. The Tribunal disagreed with this explanation and noted that only the credit side of the ledger was considered, while the debit side was ignored. The appellant claimed to have discontinued the practice of paying service tax against advances since 01.04.2012, ensuring all advances were taxed and paid. Consequently, the Tribunal found a prima facie case for total waiver of predeposit, staying recovery during the appeal. The Tribunal allowed the Stay Petition, granting the waiver of all adjudged dues.

This judgment highlights the importance of accurate record-keeping and timely tax payments in service tax matters. It underscores the necessity of providing comprehensive evidence to support claims during adjudication processes. The decision showcases the Tribunal's role in assessing prima facie cases for waiver of predeposit based on the merits of the arguments presented by the parties involved.