2013 (10) TMI 959 - AT - Service Tax

Waiver of pre deposit - Royalty and Technical know how and Intellectual Property services - Held that - applicant has deposited an amount of Rs.67,116/- which includes Service Tax and interest against the total liability of Rs.1.50 Lakhs. We feel the amount deposited is sufficient for hearing of the appeal. In these circumstances, pre-deposit of balance dues adjudged is waived and its recovery stayed during the pendency of the appeal - stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax, penalty under Section 78 of the Finance Act, 1994, and penalty under Section 77 of the Finance Act, 1994.

Analysis:
The appellant sought a waiver of pre-deposit of Service Tax amounting to Rs.1,50,119/- along with penalties imposed under Sections 78 and 77 of the Finance Act, 1994. The services in question related to Royalty, Technical knowhow, and Intellectual Property services for the period spanning from 2004-05 to 2007-08. The appellant contended that the Service Tax was required to be paid under the Reverse Charge Mechanism, particularly after the amendment to Section 66A effective from 18/04/2006. Reference was made to a decision of the Hon'ble Bombay High Court in a Ship owner's case to support this argument. It was highlighted that the appellant had already deposited an amount of Rs.67,116/-, covering service tax and interest for the period post 18/04/2006, before filing the appeal.

The Revenue did not dispute the payment made by the appellant amounting to Rs.67,116/-. The Tribunal observed that the appellant had already deposited a significant portion of the total liability of Rs.1.50 Lakhs, which was deemed sufficient for the appeal hearing. Consequently, the Tribunal decided to waive the pre-deposit of the remaining balance dues adjudged and stayed its recovery during the pendency of the appeal. The order was pronounced in the open court, thereby concluding the matter.

This judgment by the Appellate Tribunal CESTAT KOLKATA addressed the issues regarding the waiver of pre-deposit of Service Tax, penalties under Sections 78 and 77 of the Finance Act, 1994. The decision was based on the appellant's argument regarding the Reverse Charge Mechanism and the payment already made towards the outstanding liability. The Tribunal's ruling to waive the pre-deposit and stay the recovery during the appeal process signifies a balanced approach towards the matter, ensuring fairness and procedural compliance.