2007 (6) TMI 122 - AT - Service Tax

Department contended that appellant has suppressed the fact of rendering service, collecting service charges and tax from their clients After considering the fact pre-deposit of part of penalty ordered

Summary

Issues:
Service tax demand, interest, penalties, waiver of pre-deposit, stay of recovery.

Analysis:
The case involved an appeal filed by M/s. G.B. Engineering Enterprises (P) Limited against an order passed by the Commissioner of Customs and Central Excise. The Commissioner had upheld a demand for service tax, interest, and penalties imposed by the Joint Commissioner. The appellant, a manufacturer of boilers and boiler components, also provided Consulting Engineer Service to another company. It was found that the appellant had received advances for both material supply and services, but had only adjusted a portion towards services rendered. The authorities concluded that the appellant had raised invoices for services rendered, not for materials supplied, leading to the demand for service tax, interest, and penalties.

During the proceedings, the appellant argued that prior to the amendment in the statute, service tax was only required to be paid after the related service was provided. The appellant had charged service tax on the invoices for the service portion but had not credited it to the exchequer. After considering the submissions and records, the Tribunal found that the appellant had not made a prima facie case for waiver of pre-deposit and stay of recovery of the dues. The appellant had already paid the service tax and interest due but still had penalties to pay. The Tribunal ordered the appellant to deposit a specific amount within four weeks, after which the balance dues would be waived, and recovery stayed till the final disposal of the appeal. Compliance was to be reported by a specified date.

In conclusion, the Tribunal upheld the demand for service tax, interest, and penalties, while ordering the appellant to make a specific deposit to waive the balance dues and stay recovery pending the final disposal of the appeal.