2014 (2) TMI 294 - AT - Service Tax

Demand of service tax - Liability of main contractor - Held that - service tax demand of Rs.1,56,100/- has become recoverable from the appellant. The stay application is already 11 months old - Law does not postpone recovery when the liability is crystal and for belief of the appellant Revenue cannot be prejudiced. Therefore, we reject the stay application and direct the appellant to deposit entire demand within 4 weeks - Stay denied.

Summary

Issues: Stay application dismissal due to absence of appellant, possibility of deposit of service tax by main contractor, service tax liability dischargeable by contractor, rejection of stay application, direction to deposit entire demand.

In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the issue revolved around the dismissal of a stay application due to the absence of the appellant, leading to a direction to deposit the demand within a specified period. The appellant's counsel argued that the notice did not reach the appellant properly, resulting in non-appearance. Citing the judgment of the Apex Court in the case of J.K. Synthetic Ltd., it was decided to restore the appeal on record and dispose of the stay application. The counsel further contended that as a sub-contractor, there might be a possibility of the main contractor depositing the service tax, but lacked evidence to support this claim. Reference was made to the master circular clarifying that service tax liability is the responsibility of the contractor as per the law, advocating for a stay on the recovery of the demand.

Upon reviewing the appeal memorandum, it was noted that a service tax demand of Rs.1,56,100/- was due from the appellant, and the stay application had been pending for 11 months. The Tribunal deemed it inappropriate to prolong the matter without sufficient cause presented. Emphasizing that the law does not delay recovery when the liability is clear, the Tribunal rejected the stay application. The appellant was directed to deposit the entire demand within four weeks from the date of the judgment, with compliance required by a specified date. The decision aimed to prevent prejudice to the revenue based on the appellant's beliefs, ensuring timely resolution of the matter and adherence to legal obligations.

In conclusion, the Tribunal allowed the Miscellaneous Application (MA) and disposed of the stay application as per the directions provided in the judgment. The decision underscored the importance of timely compliance with tax liabilities and the need to adhere to legal obligations without undue delay, balancing the interests of both the appellant and the revenue authorities.