2013 (10) TMI 94 - AT - Service Tax

Demand - reconciliation of ST returns with the balance sheet - Held that - It is seen from the annexures A , B and C to the show cause notice dated 18.10.2010 that demand is mainly raised based on reconciliation of ST returns filed by the appellant with their balance sheet. In view of the case law relied upon, the appellant has, prima facie, made out a case for complete waiver of pre-deposit of confirmed dues and penalties. - stay granted.

Summary

Issues:
1. Stay petition against Order-in-Appeal confirming service tax demand, interest, and penalties.
2. Calculation errors in demand confirmed by Commissioner (Appeals) based on balance sheets and ST-3 returns.
3. Appeal by Revenue against dropping of part of the demand.

Analysis:
Issue 1: The appellant filed a stay petition against Order-in-Appeal confirming a service tax demand, interest, and penalties. The original adjudicating authority confirmed a demand of Rs. 12,46,855 along with interest and penalties under Finance Act, 1994. The Commissioner (Appeals) partially allowed the order, setting aside Rs. 8,85,737 of the demand and confirming Rs. 3,61,118 along with interest and penalties. The stay application sought to prevent the recovery of Rs. 3,61,118, interest, and penalties.

Issue 2: The appellant's advocate argued that the demand confirmed by the Commissioner (Appeals) was due to calculation errors based on differences between the balance sheets and ST-3 returns filed with the department. Citing the case of Alliance Builders & Contractor Limited vs. CCE, Meerut, it was contended that demand cannot be upheld solely on the basis of such differences. The Tribunal found that the appellant had made a prima facie case for complete waiver of pre-deposit of confirmed dues and penalties, leading to a stay on recoveries until the appeal's disposal.

Issue 3: The Revenue, represented by the A.R., mentioned that an appeal had been filed against the dropping of Rs. 8,85,737 from the demand, but the appeal number was not provided by the registry. The Tribunal directed the registry to link the Revenue's appeal with the current appeal for joint disposal in the future.

In conclusion, the Tribunal granted a stay on the recovery of confirmed dues and penalties, acknowledging the appellant's argument regarding calculation errors and differences between financial documents. The linkage of the Revenue's appeal for joint disposal was also ordered to streamline the process.