2014 (2) TMI 413 - AT - Service Tax

Waiver of pre-deposit - Demand of tax - Whether the applicant is liable to pay service tax on receipt of IATA commission from various airlines for the disputed period - Held that - there is no proof of payment of the tax and the documents were not produced before the lower authorities Therefore, the payment already made cannot be accepted as deposit - applicant is directed to pre-deposit 50% of the tax demanded - Conditional stay granted.

Summary

Issues involved:
- Liability to pay service tax on receipt of IATA commission
- Barred by limitation
- Proof of payment of tax
- Pre-deposit of tax amount

Liability to pay service tax on receipt of IATA commission:
The judgment addresses the issue of whether the applicant is liable to pay service tax on the receipt of IATA commission from various airlines for the disputed period. The counsel for the applicant argues that the entire demand of tax is time-barred. Additionally, it is highlighted that the Air Cargo Association of India has raised this issue before the Bombay High Court, which is still pending, indicating that the Department is aware of the matter. The counsel further mentions that a partial payment has been made, but the documents supporting this payment were not presented before the lower authorities. On the other hand, the learned AR contends that there is no evidence of tax payment, and since the documents were not submitted earlier, the payment made cannot be considered as a deposit. The tribunal directs the applicant to pre-deposit 50% of the tax demanded, subject to verifying the previously claimed deposit amount. If the initial deposit is not confirmed, the applicant must pre-deposit the entire tax amount.

Barred by limitation:
The argument of the counsel regarding the tax demand being time-barred is noted by the tribunal, which states that this issue will be examined in detail during the appeal hearing. The decision to require the pre-deposit of a portion of the tax amount is made without prejudice to the limitation issue, indicating that it will be considered separately during the appeal proceedings.

Proof of payment of tax:
The lack of proof of tax payment and the absence of documents supporting the deposit made by the applicant are emphasized by the learned AR. The tribunal acknowledges this discrepancy and instructs the jurisdictional divisional officer to verify the claimed deposit amount. If the officer finds that the full initial deposit was not made, the applicant is directed to pre-deposit the entire tax amount.

Pre-deposit of tax amount:
The tribunal orders the applicant to pre-deposit 50% of the tax demanded, subject to verification of the previously claimed deposit amount. The deadline for this pre-deposit is set at six weeks, with a compliance report due on a specified date. Upon compliance with the pre-deposit requirement, the balance amount is waived, and recovery is stayed during the appeal process.