2013 (12) TMI 1180 - AT - Service Tax

Waiver of pre-deposit - Stay of recovery - rent-a-cab service - Held that - buses owned by the appellants were allowed to be used by APSTRC as stage carriages and, on the terms and conditions of the relevant agreements, these appellants cannot be said to have rendered rent-a-cab service to APSRTC. There appears to be no dispute regarding the similarity of the terms of the agreements with those of the agreements considered in the cited stay order. If that be so, the appellants before us should be held to have made out prima facie case against the impugned demands of service tax raised under the head rent-a-cab service - Following decision of UPSRTC vs. Commissioner 2009 (4) TMI 477 - Allahabad High Court - Stay granted.

Summary

Issues involved:
- Waiver of pre-deposit and stay of recovery against adjudged dues
- Non-compliance with Section 35F of the Central Excise Act
- Prima facie case against impugned demands of service tax
- Interpretation of judgments for legal support
- Categorization of cases for different treatment

Analysis:

Issue 1: Waiver of pre-deposit and stay of recovery against adjudged dues
The judgment addresses 22 applications seeking waiver of pre-deposit and stay of recovery against adjudged dues. The appellants claimed a prima facie case based on previous stay orders by the bench. The facts of the present cases were found to be similar to those covered by the cited stay orders, indicating a strong case against the impugned demands of service tax under the head of 'rent-a-cab service.'

Issue 2: Non-compliance with Section 35F of the Central Excise Act
Out of the 22 cases, 9 were different as the learned Commissioner (Appeals) had dismissed the appeals on the grounds of non-compliance with Section 35F of the Central Excise Act. The judgment highlighted the need for the lower appellate authority to dispose of these appeals on merits without insisting on pre-deposit, as the appellants had a prima facie case against the impugned demands.

Issue 3: Prima facie case against impugned demands of service tax
The judgment emphasized that the appellants had established a prima facie case against the demands of service tax. It differentiated between the 13 cases where stay applications were allowed and the 9 cases where appeals were dismissed due to non-compliance with Section 35F, directing the lower appellate authority to consider the appeals on merits without pre-deposit.

Issue 4: Interpretation of judgments for legal support
The judgment discussed a judgment of the Hon'ble Allahabad High Court, where a writ petition by UPSRTC was dismissed for lack of locus standi. The judgment clarified that an obiter dictum in a High Court judgment dismissing a writ petition could not have persuasive effect, especially in cases where the appellants had a strong prima facie case against the impugned demands.

Issue 5: Categorization of cases for different treatment
The judgment categorized the cases into two groups and provided specific directions for each category. Category 1 cases were granted waiver of pre-deposit and stay of recovery, while Category 2 cases had their impugned orders set aside for a remand to the Commissioner (Appeals) to dispose of the appeals on merits without pre-deposit, in accordance with the law and principles of natural justice.

Overall, the judgment meticulously analyzed each issue, considered legal precedents, and provided detailed instructions for the treatment of different categories of cases, ensuring fairness and adherence to legal procedures.