2014 (4) TMI 60 - AT - Service Tax

Modification of stay order - Held that - appellant has not made out any case for modification of our stay order dated 1.10.2013 as we have come to the conclusion based upon our understanding of the fact that the appellants had not deposited the amount of service tax liability collected by them from the service recipient during the period 2006-07 to 2010-11. The Revenue authority started investigation, though they may have paid some amount periodically. Assuming to not agreeing with the contention of the learned counsel that service tax liability to be reduced to some extent, we find that the appellants are also liable for interest on the amounts of service tax liability which gets fastened on them and also penalty which needs to be imposed. Keeping in mind that our order dated 1.10.2013 directing the appellant, SISAPL to deposit an amount of Rs. 83 lakhs and the appellant, SISA to deposit Rs. 72 lakhs does not require any reconsideration - Modification denied.

Summary

Issues:
Stay order modification applications for depositing service tax liability amounts by the appellants.

Analysis:
The judgment pertains to modification applications filed by two appellants, M/s Shiva Industries Security Agency Pvt. Ltd. (SISAPL) and M/s Siva Industrial Security Agency (SISA), seeking to modify a stay order dated 1.10.2013. The learned counsel for the appellants apologized for not being present during the disposal of stay petitions and requested to deposit the actual tax liability amounts. The counsel argued that SISAPL had claimed cum-tax benefit before the adjudicating authority, with an estimated tax liability of Rs. 30 lakhs, and SISA's tax liability, after considering cum-tax benefit, would be around Rs. 32 lakhs. The counsel requested the appellants to deposit the actual tax liability amounts to modify the stay order accordingly.

The learned AR contended that interest liability on the tax amount should be calculated based on the cum-tax benefit and highlighted that the appellants had not discharged service tax for the period 2006-07 to 2010-11. The tribunal considered the submissions and records, concluding that the appellants failed to establish a case for modifying the stay order. The tribunal found that the appellants had not deposited the service tax liability collected from service recipients during the mentioned period, despite periodic payments made during the investigation by the Revenue authority.

The tribunal upheld its previous order dated 1.10.2013, directing SISAPL to deposit Rs. 83 lakhs and SISA to deposit Rs. 72 lakhs, without reconsideration. The tribunal emphasized that the appellants were also liable for interest on the service tax liability amounts and potential penalties. Consequently, the modification applications filed by the appellants were dismissed. However, the tribunal granted an extension of eight weeks for depositing the specified amounts and instructed the counsel to report compliance by a specified date, warning that non-compliance would lead to dismissal of the appeals without further opportunities for the appellants.