2013 (11) TMI 1256 - AT - Service Tax

Waiver of pre deposit - Penalty u/s 78 - Held that - amount of service tax of Rs.13,80,351/- paid by the applicant, during the course of adjudication proceeding, the initial demand of Rs.95,75,400/- was reduced to Rs.82,87,547/- by the adjudicating authority. The Ld. Consultant pleaded that the applicant is a partnership firm and incurring heavy losses. In these circumstances, the applicant is directed to make a pre-deposit of Rs.25.00 Lakhs within a period of Twelve weeks and report compliance on 02/09/2013. On deposit of the said amount, pre-deposit of the balance dues adjudged would stand waived and its recovery would be stayed during pendency of the appeal - Stay granted.

Summary

Issues: Application for waiver of pre-deposit of Service Tax and penalties under Finance Act, 1994.

Analysis:
The judgment pertains to an application seeking waiver of pre-deposit of Service Tax amounting to Rs.82,87,547/- along with an equal amount of penalty imposed under Section 78 and penalties under various other provisions of the Finance Act, 1994. The appellant, represented by a Consultant and an Advocate, argued that the disputed amount had not been paid by the service receiver, leading to financial hardship as the appellant was facing heavy losses. Despite this, an offer to deposit Rs.25.00 Lakhs was made. On the other hand, the Revenue, represented by an Additional Commissioner, reiterated the findings of the Commissioner. After hearing both sides and examining the records, it was noted that the initial demand of Rs.95,75,400/- was reduced to Rs.82,87,547/- considering the service tax amount of Rs.13,80,351/- paid during the adjudication proceeding. The appellant, a partnership firm incurring significant losses, was directed to make a pre-deposit of Rs.25.00 Lakhs within twelve weeks. Compliance was to be reported by a specified date, failing which the appeal would be dismissed without further notice. Upon deposit of the specified amount, the pre-deposit of the remaining dues would be waived, and the recovery stayed during the appeal's pendency.

This judgment underscores the importance of compliance with tax obligations and the provision for pre-deposit in tax disputes. It highlights the significance of financial circumstances, such as heavy losses faced by the appellant, in determining the quantum of pre-deposit required. The decision balances the interests of the appellant and the Revenue by allowing for a partial deposit while ensuring that the appeal process is not unduly delayed. The specified timeline for compliance and the consequences of non-compliance demonstrate the procedural rigor followed by the Tribunal in such matters.