2014 (3) TMI 114 - AT - Service Tax

Demand of service tax - Abuse of law - Held that - Gravity of the matter, calls for disposal of the stay application today for the reason attributable to the appellant who has abused process of law. While undue hardship was given due weightage as against extent of demand stated above, Revenue s interest has also been given utmost importance following ration of the Apex Court in the case of Assistant Collector of Central Excise vs, Dunlop India Ltd. 1984 (11) TMI 63 - SUPREME Court and in the case of Benara Valves Ltd.vs.CCE 2006 (11) TMI 6 - SUPREME COURT OF INDIA - Both sides agree that reconciliation is pending. But to protect interest of Revenue, as an interim measure, the appellant is directed to deposit Rs.10 lakhs within six weeks from today - Decided against assessee.

Summary

Issues: Delay in submission of materials by the appellant preventing Revenue from considering the plea, abuse of process of law by the appellant, liability of service tax on manpower supply service, failure of the appellant to provide documents to Revenue, imposition of penalties, gravity of the matter, interim measure for deposit by the appellant.

The judgment addresses the issue of delay in the submission of materials by the appellant, which prevented the Revenue from considering the plea effectively. The appellant had failed to provide the relevant materials despite orders to do so, leading to an abuse of the legal process. This delay was seen as an attempt to avoid discharging the adjudicated demand on the pretext of the pending stay application. The record indicated that the service tax demand was confirmed against the appellant for supplying manpower, and the adjudicating authority had opined that the service tax was leviable due to the nature of the appellant's business as a manpower recruitment and supply agency.

Furthermore, the appellant's failure to provide the required documents to the Revenue, despite specific orders, was highlighted. This lack of cooperation prejudiced the Revenue's interests, especially considering the substantial service tax demand, penalties under various sections of the Finance Act, and accrued interest. The gravity of the matter necessitated the disposal of the stay application promptly, with due consideration given to both the appellant's undue hardship and the Revenue's interests, as emphasized by previous court rulings.

In an effort to protect the Revenue's interests as an interim measure, the appellant was directed to deposit a significant sum within a specified timeframe. The interim measure aimed to ensure compliance and stay the realization of the balance demand during the appeal's pendency. Both parties agreed that reconciliation was pending, but the directive to deposit the specified amount was crucial to safeguard the Revenue's interests while the appeal process continued. The judgment underscored the importance of balancing the interests of both parties and upholding the principles laid down by the Apex Court in similar cases.