2014 (2) TMI 201 - AT - Service Tax

Waiver of pre-deposit of service tax - Penalty under Section 78 - Tour operator services - Held that - applicants never contested that the services provided by them to M/s Durgapur Steel Plant, were not taxable rather, they admitted their service tax liability, as demanded in the show-cause notice - they had already submitted their bills to M/s DSP for realizing the service tax amount on work-order basis and on receipt they would pay the same. He only requested to take a lenient view while deciding the case since there was no malafide intention at their end - applicants could not make a prima-facie case for total waiver of pre-deposit of dues adjudged against them - Conditional stay granted.

Summary

Issues: Application for waiver of pre-deposit of service tax and penalty under various provisions of the Finance Act, 1994.

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The judgment pertains to an application for waiver of pre-deposit of service tax amounting to Rs.59,97,845/- and an equal penalty under Section 78 of the Finance Act, 1994, along with other penalties imposed under different provisions of the Act. The applicants had provided services to Durgapur Steel Plant categorized as Tour operator services from 2004-2005 to 2006-2007, and as rent-a cab operator services from 2007-2008 to 2008-2009. The applicants did not dispute the leviability of service tax but stated that they would pay the amount once received from the Durgapur Steel Plant. The Commissioner found that the applicants admitted their service tax liability and had already taken steps to recover the amount from the Durgapur Steel Plant. The Tribunal observed that the applicants failed to establish a prima facie case for a total waiver of pre-deposit and directed them to deposit 50% of the service tax within eight weeks, with non-compliance leading to the dismissal of the appeal. The balance amount would be waived upon the deposit, and recovery stayed during the appeal's pendency.

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In this case, the primary issue revolves around the waiver of pre-deposit of service tax and penalties under the Finance Act, 1994. The Tribunal noted that the applicants did not contest the leviability of service tax but rather admitted their liability, expressing their intention to pay upon receiving the amount from the Durgapur Steel Plant. The Commissioner's findings indicated that the applicants had acknowledged their service tax liability and had initiated steps to recover the amount from the Durgapur Steel Plant for the respective periods. Despite the applicants' submissions, the Tribunal found that they failed to establish a strong case for a complete waiver of the pre-deposit. Consequently, the Tribunal directed the applicants to deposit 50% of the service tax within a specified timeframe, warning that non-compliance would lead to the dismissal of the appeal. Upon the deposit of the required amount, the remaining dues would be waived, and recovery stayed during the appeal process, providing a balanced approach to the issue at hand.