2014 (1) TMI 1374 - AT - Service Tax

Waiver of pre deposit - Availment of CENVAT Credit - Cenvat credit taken more than the Service tax actually paid - Held that - appellant has not been bale to produce any evidence that they had paid the tax only on the amounts received. I find that if the department has to make out an offence case against the appellant, it is the responsibility of the department to show that appellant had received the amount but did not pay the Service tax by exercising powers available under the statute. If that has not been done, appellant is entitled to claim that he has paid the tax correctly. In the absence of any evidence to show that appellant has not paid the tax on the-amount received and in the absence of specific allegation in the show cause notice or in the findings of the lower authorities, I find that appellant has made out a prima facie case for complete waiver. Accordingly, the requirement of pre-deposit of the dues is waived and stay against recovery is granted during the pendency of appeal - Stay granted.

Summary

Issues:
1. Appellant's liability for Service tax due to discrepancies in Cenvat credit claimed by the principal.
2. Appellant's defense based on the timing of tax payments in relation to invoice receipts.
3. Burden of proof on the department to establish non-payment of Service tax by the appellant.
4. Prima facie case for waiver of pre-deposit and grant of stay against recovery during appeal.

Analysis:
1. The judgment addresses the issue of the appellant's liability for Service tax due to discrepancies in Cenvat credit claimed by the principal. The appellant, acting as a Direct Selling Agent (DSA) for a finance company, raised invoices on behalf of the principal. The department initiated proceedings alleging that the principal had taken more Cenvat credit than the Service tax actually paid by the appellant, leading to a demand against the appellant and imposition of penalties.

2. The appellant's defense centered on the timing of tax payments in relation to invoice receipts. The appellant argued that they paid the tax upon receipt of the amounts, while the principal claimed credit based on invoices. The appellant contended that if the principal wrongly took credit, they should not be held liable for the Service tax. The Chartered Accountant representing the appellant emphasized the importance of verifying whether the appellant had paid Service tax on the amounts received.

3. The judgment highlights the burden of proof on the department to establish non-payment of Service tax by the appellant. The Member observed that the department must demonstrate that the appellant received the amount but did not pay the Service tax, utilizing powers available under the statute. In the absence of evidence showing non-payment by the appellant and specific allegations in the show cause notice or lower authorities' findings, the Member found that the appellant had made a prima facie case for complete waiver.

4. Finally, the judgment concludes by granting a waiver of pre-deposit and stay against recovery during the appeal process. The Member, after reviewing the records, determined that the appellant had paid tax correctly on amounts received. As a result, the requirement of pre-deposit of dues was waived, and a stay against recovery was granted pending the appeal. This decision underscores the importance of proper evidence and specific allegations in establishing liability for Service tax, ultimately leading to a favorable outcome for the appellant in this case.