2014 (2) TMI 242 - AT - Service Tax

Demand of service tax - Inclusion or exclusion of value of STG services - Held that - interests of justice are met by waiver of pre-deposit and grant of stay of all further proceedings pursuant to the impugned order, on condition that the appellant remits 50% of the service tax within eight weeks - Conditional stay granted.

Summary

Issues:
1. Whether the service tax demand assessed by the adjudicating authority and confirmed in appeal is liable to be paid by the petitioner-appellant along with interest.
2. Whether the petitioner furnished sufficient material to support the claim for exclusion of certain components of services provided prior to the taxable period.
3. Whether waiver of pre-deposit and stay of further proceedings should be granted to the appellant.

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Issue 1:
The judgment addresses the question of whether the service tax demand of Rs. 43,60,729/-, as assessed and confirmed, is payable by the petitioner-appellant along with interest. The petitioner failed to provide material supporting the claim for exclusion of specific components of services provided before the taxable period. Consequently, the orders denied the benefit of exclusion to the petitioner. However, the petitioner submitted additional material in a separate compilation to substantiate the claim, which needs consideration during the final hearing of the appeal. The Tribunal, in the interest of justice, waived the pre-deposit and granted a stay on further proceedings, subject to the appellant remitting 50% of the service tax within eight weeks. Failure to make the deposit would result in the dissolution of the stay, allowing the Revenue to pursue recovery of the assessed liability.

Issue 2:
The petitioner's failure to provide material supporting the claim for exclusion of certain components of services provided before the taxable period led to the denial of the benefit by the adjudicating authority and in appeal. However, the petitioner later submitted additional material to substantiate the claim, which necessitates consideration during the final hearing of the appeal. This new material was presented in a separate compilation, indicating an effort by the petitioner to support their assertion regarding the value of services rendered prior to the taxable period.

Issue 3:
Considering the facts and circumstances, the Tribunal found that the interests of justice would be served by granting a waiver of pre-deposit and a stay on further proceedings pursuant to the impugned order. The appellant was required to remit 50% of the service tax within eight weeks to maintain the stay. Failure to comply with this condition would result in the immediate dissolution of the stay without further reference to the Tribunal, allowing the Revenue to take appropriate steps for the recovery of the assessed liability. The Tribunal disposed of the stay application accordingly, with a compliance report due on a specified date.