2013 (11) TMI 454 - AT - Service Tax

Release of freezed bank accounts - Appellant had availed in-eligible benefit of Notification No.1/2006-ST, by discharging the Service Tax liability on 33% of the value of contract for which he received the paymen - Held that - There is no agreement/contract on record to go into whether the claim of the appellant as to the contract was divisible. It is also to be noted that the demand has arisen on the ground that the appellant has not included the value of steel in the bills raised by him and such steel was supplied only in respect of 4 invoices. We also note that the appellant is claiming the bonafide belief having discharged Service Tax liability after availing the abatement under Notification No.1/2006-ST, as amended from time to time - Appellant should deposit an amount of Rs.5 lakhs in order to hear and dispose the appeal - stay granted partly.

Summary

Issues: Stay Petition for waiver of pre-deposit of Service Tax

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the issue at hand is the Stay Petition filed for the waiver of pre-deposit of Service Tax amounting to Rs.25,53,158/-, interest, and penalty. The lower authorities had confirmed this Service Tax liability along with penalty, citing that the appellant had availed an ineligible benefit under Notification No.1/2006-ST by discharging the Service Tax liability on only 33% of the contract value received. The appellant claimed a bonafide belief in following the abatement under the said notification. However, the demand arose due to the non-inclusion of the value of steel in the bills raised, which was supplied in only four invoices. The tribunal noted the lack of a clear agreement or contract to determine the divisibility of the contract. The tribunal acknowledged that a detailed examination of the matter would require considerable time, and hence, in order to proceed with the appeal, the appellant was directed to deposit Rs.5 lakhs within eight weeks for further consideration. The tribunal allowed the application for waiver of pre-deposit of the remaining amounts, with recovery stayed pending the appeal's disposal.

This judgment emphasizes the importance of proper documentation and clarity in contractual agreements to determine tax liabilities accurately. It also highlights the need for compliance with deposit requirements to facilitate the appeal process effectively. The tribunal's decision to allow waiver of pre-deposit for the balance amounts upon compliance underscores the procedural aspects of tax appeals and the significance of meeting financial obligations to proceed with legal proceedings effectively.